GOOD BUSINESS JOURNEY
This paper is made wiTh 90% sugar cane waste sourced from previously disadvantaged local suppliers, and 10% wood fibre from sustainable forests. iT supporTs our Good business journey Goals of protecting the environment and empowering our people.
THEGOODBUSINESSJOURNEYREPORT2010
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CHAIRMANSSTATEMENTIn2007weconsolidatedandacceleratedourprevioussustainabilityeffortsunderourgoodbusinessjourneyprogrammewhichbroughttogetherourphilosophythatthetruesustainabilityofacompanyisreliantonitsowncontinuousperformanceandasustainablesocietyandenvironment.Wefurtherbelievethatalltheelementsofeconomicgrowth,transformation,socialdevelopment,theenvironmentandclimatechange,caneitherformaviciousorvirtuouscircle.TheGoodbusinessjourneyaimstoensurewedriveavirtuouscirclethatwillbenefitallofourstakeholders.
Thebusinesscase
WeconsidertheGoodbusinessjourneyasakeytoenhancingourbrandwhilebeingcognizantoftheimpactsofourbusinessonsocietyandtheenvironment.Wehaverealisedoverthepastfewyearsthatourfocusonsocialandenvironmentalissuescandriveinnovationandoperationalefficienciesinourbusiness.
Ourcustomerresearchshowsgrowingawarenessoftheprogramme,andhighlevelsofsupportforitsobjectives.Inparticular,customersincreasinglywanttounderstandwhereproductscomefrom,andbecertainthatthesearesourcedethicallyandwithoutharmtotheenvironment.Werecognisethatourcustomersplayanimportantroleinhelpingusmakeadifferencetoourcommunitiesandenvironmentandwearecommittedtoprovidingthemwithasmuchinformationandassistanceaspossible.
Internally,sustainabilityisoneofoursevenvalues,andwemeasureemployeeunderstandingandbackingforourgoodbusinessjourneyprogrammethroughourannualpeoplesurvey,whichhasshownhighlevelsofsupport.Somethingwecannotmeasurehowever,istheinnovationandenthusiasmofemployeesacrosstheorganizationinintegratingsustainabilitythinkingintotheirdailyjobs,andbringingnewprojectstolifethathavechangedthewayweoperateasanorganisation.
WearecontinuingtoworktobuildouremployeesknowledgearoundsustainabilitytoenablethemtohelpcolleaguesandcustomersunderstandtheirimpactsanddrivetheGoodbusinessjourneymessagesintheworkplaceandathome.Anexampleofthishasbeenanenergysavingcampaignacrossthebusiness,whichhashelpedemployeesreduceenergyusageinstoresandintheirhomes.
Experiencehasshownthatmostsustainabilitychallengescannotbesolvedbyonecompanyactingalone,andweareexcitedaboutthesupportwehavereceivedfromoursuppliersinimplementingprogrammeslikefarmingforthefuture,andthemanythingswehavelearntfromtheirefforts.WevealsoseenbusinessrelationshipswithcompanieslikeABSAandEngendevelopintoexpansionsofoursocialandenvironmentalinitiativeswiththeexpandedEduplantprogrammeandrecyclingatEngenservicestationstwoclearexamples.
Progressandchallenges
Wearepleasedwiththerecognitionthatwehavereceivedfromanumberofourstakeholdergroupsandwewillworkhardtosustaintheseefforts.Inparticular,beingchosenasafinalistforthethirdconsecutiveyearforinternationalresponsibleretaileroftheyearandbeingrankedsecondintheCarbonDisclosureProjectLeadershipindexinSouthAfricareinforcesourconsistencyandsustainabilityprogress.
Someofourhighlightsfortheyearincludethelaunchofourfarmingforthefutureprogrammethatisimprovingsoilandwaterresourcesacrossourproduceagriculturalbase;asuccessfulpilotofcustomerrecyclingfacilitiesatEngenservicestations;asignificantimprovementinourBEEscoreandshiftfromlevel6tolevel5;andtheexpansionofourEduplantprogrammeinconjunctionwithABSAandEngen.
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Wehavecontinuedtoreducewateruse,aswellasdevelopinganumberofprogrammestomeasureandreducewaterusageandimprovewastewatermanagementinoursupplychain.WealsocontinuetooffsetallourdirectwaterusagethroughWWFswaterneutralprogramme.
Energyusagehasdecreasedby18%fromour2004benchmark,andwehavesuccessfullyrolledoutnewlightingandenergymeasurementtechnologies,aswellasretrofittingrefrigerationtechnologiesandreviewingdistributionmethodstomeetour30%relativereductiontargetfor2012.
Wehavereducedourfoodspackagingby660tonstodate,aswellasincreasingtheamountofpackagingthatisrecyclable,andoursalesofreusablebags.Ourwastetolandfillratiocontinuestoapproachthetargetofzerowehavesetfor2012.
DuringtheyearwecontributedR314mtoarangeofcharityorganisationsaspartofourcommitmenttocommunityupliftment.OurcommunityfocushasbeenonaddressingtwoofourcountryskeychallengesfoodsecurityandeducationviaourEduplantandMySchoolprogrammesandthedistributionofsurplusfood.
Wehaveexperienceddifficultywithachievingsomeofourtargets,forinstance,salesoforganicproducts,ourpreferentialprocurementtargetsandprogressonpackagingreductions,whichweneedtobalancewithkeepingfoodwasteduetodamagelow.ThecontinuingdifficultiesinthetextileindustryinSouthAfricaareanotherareaofconcerntous.Weareconfidentthatwearemakinggoodprogressbutalsonotetheareasrequiringattention,particularlysomeofourenvironmentalandtransformationtargets.
Goodbusinessjourneymeasurementandgovernance
Atacorporatelevel,wearesatisfiedwiththeprogressthebusinesshasmadeouroverallscorefor2010againstouroneyeartargetsis84%(midyear:76%),thefirsttimethatwehaveachievedover80%.Thescoreof71%againstourfiveyearobjectives(midyear:63%)ispleasing,althoughweknowthatweneedtoaccelerateourprogresstomeetthe2012targets.Ourcomprehensivemeasurementandtrackingsystemiswellembeddedinthebusinessandprogressmeasurementsaredonetwiceperannum.Thesescoresreflectourprogressasanorganisationtowardsthestatedtargets,atbothacorporateandkeyindicatorlevel(i.e.transformation,economic,governance,socialandenvironmental).Wealsotrackprogressbybusinessunitsagainsteachoftheindicators,andhaveincludedgoodbusinessjourneyperformancemeasuresinthescorecardsofourteams.
Anassuranceframeworkisinplaceandaninternalauditcoverageplanhasbeencompletedforthegoodbusinessjourneyinareaswhereexternalverificationisnotavailable.ExternalverificationofourcarbonfootprintandBEEstatuswasalsocompletedasasteptowardsabroaderassuranceprocess.
Thegoodbusinessjourneyprocessisalsointegratedstronglyintothecompanysriskmodel,andagoodbusinessjourneyriskprofileisreviewedannuallybytheSustainabilityCommittee,whichplaysanimportantoversightroleinensuringstructuresandpoliciesareinplacetoalloweffectivedeliveryofourgoodbusinessjourneytargetsbymanagement.
Lookingforward
Althoughwerecognisethebroadnatureofourgoodbusinessjourneyprogramme(over200targetsset)isastrength,wewillhoneinonafewfocusareas:
Reductioninenergyusage,withinthebroaderclimatechangecontext;improvingthebroaderimpactofoursupplychainactivitiesonwaterresources;recyclabilityofpackagingandtheprovisionofrecyclingfacilities;workingwithoursupplierstopromotesustainablefarmingmethods,thatencouragebiodiversity;andbuildingourworkforceandsupplychaintorepresentthetransformationimperativesinourcountry.
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WehavelearntmuchaboutissuesthataffecttheenvironmentandsocietysinceweannouncedourgoodbusinessjourneyprogrammeinApril2007,andcontinuetolearnmoreeveryday,asmoreandmoreinformationontheissuesbecomeavailable.
Wealwaysthoughtofour2012targetsasthefirststepinamuchlongerjourney,andhavebeenworkinghardtorefineourfocusareas,andaddnewtargetstoourprogramme.
HIGHLIGHTSANDRECOGNITIONKEYSUSTAINABILITYINDICATORS
Indicator 2010 2009 2008 Progress
Revenue R23.7bn R21.9bn R21.8bn
Returnonequity(ROE) 39.4% 26.3% 27.6%
AdjustedHeadlineEarningspershare(EPS) 157.2 126.0 115
Sharepriceappreciation 1225 275 (1120)
Foodmarketshare 8.3% 8.5% 9.2%
Clothing,footwearandaccessoriesmarketshare 15.3% 14.4% 15.3%
Goodbusinessjourneyindexoverallscore 84% 79% 77%
CustomertrackingstudyregardingGoodbusinessjourneyelements
26% 24.9% 21%
Numberofpermanentemployees 18977 17551 18568
Trainingandskillsdevelopmentscore(outof15) 10.3 7.7 10.5
Employmentequityscore(outof15) 10.6 9.8 9.8
Preferentialprocurementscore(outof20) 10.4 5.7 2.4
Corporatesocialinvestmentcontribution(Rm) R314m R292m R267m
Energy(reductioninrelativeconsumptionfrombenchmark)
18% 12% 10%
Carbonfootprint(totaltonsofCO2) 452311 408627 356133
Water(reductioninrelativeconsumptionfrom 26% 11.5% 5%
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benchmark) (stores)
Healthandsafetynumberofinjuriesonduty 693 551 511
Foodspackagingreduction(towards20%reductionby2012)
6.6% 3.3% Benchmarkyear
InclusioninJSESRIindex x x x
BUSINESSRECOGNITION
Woolworthswasrankedsecondoutofthetop100companiesinSouthAfricaontheClimateChangeDisclosureLeadershipIndexbytheCarbonDisclosureProject,aglobalinitiativetoencouragecompaniestodisclosetheirgreenhousegasemissions.(Firstinthelowimpactcategoryin2008).
WinneroftheretailcategoryintheSouthAfricanCarbonLeadershipAwards2010. FinalistintheAgriculturecategoryforthe2010MailandGuardianGreeningtheFutureawardsforour
FarmingfortheFutureprogramme. WoolworthswaschosenasafinalistintheESGcategoryatthe6thannualAfricanAccessNationalBusiness
Awards2010. Woolworthswaschosenasafinalistinthe2010SANEAEnergyawardsintheCategory:EnergyProjectAward
2010. In2008WoolworthswasnamedInternationalResponsibleRetaileroftheYearattheWorldRetailCongress.In
2009and2010wewereshortlistedagainasoneofthefinalistsforthisprestigiousaward. WoolworthswasagainincludedintheJSESociallyresponsibleinvestment(SRI)indexfor2009/10andwas
namedasoneoftheindexbestperformers. WoolworthsClothingfirstasthemostfashionableclothingretailerTheSundayTimesTopBrandssurvey, WoolworthsFoodwastheoverallwinnerandWoolworthsClothingclaimedfourthplaceinthe2009AskAfrika
OrangeIndexserviceexcellenceawards.ThissurveyiswidelyregardedasthelargestserviceexcellencebenchmarkinSouthAfrica.
WoolworthsTastemagazinewonGoldforcustommagazineoftheyearintheAdmagawards WHLAnnualreportfortheyearendedJune2009hasonceagainbeenratedasExcellentintheE&YExcellence
inCorporateReportingawards
STAKEHOLDERENGAGEMENTStakeholderengagementisintegraltothewaywedobusiness,andunderstandingtheinterestsandexpectationsofourstakeholdersplaysacrucialroleindeepeningandextendingourrelationships.
WoolworthsstrivestobeSouthAfricasleadingretailbrand,offeringmerchandisethatisremarkablyaffordablewithauniquecombinationofquality,value,innovationandstyle.Woolworthscustomersareattheheartoftheretailstrategythatdrivesallmerchandisingandsellingdecisions.
Understandingcustomerneedsiscriticaltoprovidingtherightproductattherighttimeinthespecificstorewherecustomersexpecttofindwhattheyarelookingfor.Woolworthshasover3.8millioncustomers,andtheinsightsfromourcustomersenrichoursegmentationmodelanddrivenewopportunities.Duringtheyear
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customershavegivenusinsightintotheirperceptionofourvalueofferingandpromotions,assistingoursegmentationstrategy.
Woolworthsiscommittedtomeetingcustomersneedsateverylevelandwemonitorcustomersatisfactionthroughoutthebusinessusingvariousmechanisms.
Improvedcustomerunderstandinghasledtobetterprofilingandcataloguingofstores,withanincreasinglysegmentedoffer.Workisalsobeingdonetodriveasubbrandreviewtomakeeachbrandsimpler,clearerandbettersegmented.
Wewillbeintroducingatieredloyaltyprogramme,whichwillbedesignedto:
Buildmoreprofitablelongtermrelationshipswithmoreofourcustomers Rewardandretainourloyalcustomers.Employeeunderstandingandbackingforourgoodbusinessjourneyprogrammeismeasuredthroughourannualpeoplesurvey,whichhasshownhighlevelsofsupport.Somethingwecannotmeasurehowever,istheinnovationandenthusiasmofemployeesacrossthebusinessinintegratingsustainabilitythinkingintotheirdailyjobs,andbringingnewprojectstolifethathavechangedthewayweoperate.
WecontinuetobuildouremployeesknowledgearoundsustainabilitytoenablethemtohelpcolleaguesandcustomersunderstandtheirimpactsanddrivetheGoodbusinessjourneymessagesintheworkplaceandathome.
Maintainingandgrowingourcredibilityamongshareholdersandthebroaderinvestmentcommunityisakeyobjective.Thisisdonebyprovidingrelevant,timeousandtransparentcommunicationusingavarietyofdifferentmediatoallowfarreachingaccesstoinformation,ensuringallourshareholdersenjoyathoroughunderstandingofourperformanceandstrategygoingforward.Wehavemadeparticulareffortoverthelastfinancialyeartoengagewith,andupdateinvestorswhoarefocusedonEnvironment,socialandgovernanceissues,onourprogress.
RaisingtheprofileofthekeysustainabilityissuesinSouthAfricaisanintegralpartofWoolworthscommitmenttotheGoodbusinessjourney.Woolworthsongoingengagementwiththemediahasbeenanimportantaspectofmanagingthecompanyscorporatereputationaswellasraisingawarenessofkeysustainabilityissues.
Experiencehasshownthatmostsustainabilitychallengescannotbesolvedbyonecompanyactingalone,andweareexcitedaboutthesupportwehavereceivedfromoursuppliersandspecialistnonprofitorganisationsinimplementingprogrammeslikefarmingforthefuture,andthemanythingswehavelearntfromtheirefforts.Thesesustainabilityinitiativeshavebeenanaturalextensionofthelongstandingpartnershipswesharewithoursuppliers,andhaveallowedustoformulateunique,andoftenfarmspecific,responsestobiodiversity,transformationandotherobjectives.
Woolworthsoperatesatightlyintegratednetworkofsuppliers,toensureexactingqualitystandardsandformslonglastingrelationshipswithitssuppliers.ConformancetotheWoolworthssuppliercodeofbusinessprinciplesisaprerequisitetoensuresocialandenvironmentalresponsibilityacrossthesupplychain.
Woolworthsalsopartnerswithabroadrangeofnonprofitorganisationsacrossarangeofenvironmental,socialandtransformationissues.ThisincludestheWorldwideFundforNature(WWF),ConservationInternational,Food&TreesforAfricaandHeartbeat,amongstothers.
Thefollowingspreadillustratesourstakeholderengagementprogrammeinmoredetail:
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stakeholderengagementwhatweredoing
Ourstakeholders WhyweengageIssuesonwhichweengageinclude:
Howweengage Ourresponse
Customers Inorderto:
understandourcustomerneeds;
enhancetheWoolworthsbrand;and
growrevenue.
consumerpreferences;
consumercomplaintsandissues;and
theGoodbusinessjourney.
Electronicandpersonalengagementwith
customersincluding:
instoreticketing,labellingandpackaging
focusgroupsanddiscussions;
deskresearch;
customersurveys,mysteryshoppingsurveys;
socialmedia
marketingcommunication,advertisinganddirectcustomermail;and
Woolworthscallcentres.
ongoingproductdevelopmentandinnovation;
businessfocusonkeyissues,forexampleavailability,productchoice,storelocationandservice;and
adoptingmethodsofcommunicationtomeetcustomerpreferences.
Employeesandserviceproviders:
individuals;
collective;
independentcontractors;and
serviceproviders.
Inorderto:
sharerelevantinformationandgetinputandfeedback;
attractandretaintalent;
developahighperformanceorganisation;
improvecompetenceandskills;
optimisedeliveryandservice;and
enhancepeoplessenseofvalueandcommitment.
Woolworthsvisionandvalues;
businessstrategy;
businessissues,developmentsandnew
productsandcampaignsthataffectemployees;
employeedevelopmentprogrammes;and
employeeconcernsandissues.
ongoingdirectandindirectengagementelectronic,verbalandwritten;
research/peoplesurvey;
communicationandinvolvementforums;and
regular,formalcommunication,includingtelevisionbroadcasts,publicationsandteammeetings.
Ongoingreviewof:
employeehealthandsafetyprogrammes,forexample,HIV/Aidsprogrammes;
employeedevelopment,remunerationandbenefits;
communicationanditseffectiveness;and
relevantbusinessissues,forexampleshrinkage
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Shareholders:
individual;and
institutional.
Tocreate:
aninformedperceptionofWoolworths;
moreaccurateexpectations;
apositiveinvestmentenvironment;
valueinthebusiness;and
approvalforcorporateactions.
businessperformance;
businessexpectationsandstrategy;and
economic,socialandenvironmentalconcerns.
annualgeneralmeeting/generalmeetings;
biannualanalystsresultsreview;
individual,documentedanalystsmeetings;and
reporting,includingtheannualreport,sustainabilityreport,webcamandwebsiteupdates.
revisedreportingformatsasdeemednecessary.
Suppliers:
local;and
international.
Todeliver:
productwhichfurtherstheambitionsoftheGoodbusinessjourney;
newandinnovativeproduct;
consistentqualityandstandards;and
conformancetoWoolworthssupplier
businessprinciples.
issuesthatposearisktotheWoolworths
businessand/orbrand;
productdevelopment;
environmentalandsocialresponsibility
standards;and
theGoodbusinessjourney.
ongoingelectronicandpersonal
engagement,includingsupplier
conferencesandsuppliervisits;and
bestpracticeresearchandinternationalbenchmarking.
reviewofproductoffering;and
regularenvironmentalandsocialresponsibilityaudits.
Franchisees:
local;and
international.
Inorderto:
ensureaconsistentcustomerexperience;
growrevenue;and
buildandextendthereachoftheWoolworthsbrand.
businessissues;
initiatives;and
opportunities.
ongoingelectronicandpersonalengagement,includingmeetings,anannualfranchiseconferenceandregularfranchisebuyingweeks.
franchiseesatisfactionsurveys.
reviewingourprocessesformanagingthebusiness.
Governmentdepartmentsof:
Tradeandindustry(dti);
Inorderto:
discussissuesofmutualconcern;
tradeandindustrypolicyonsector
development,tradeissues
ongoingelectronicandpersonal
engagement;
consolidationofcombinedretailpositionsasinputtogovernment;
sharingofinformationon
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Labour;
Agriculture;
Wateraffairsandforestry(DWAF);
Environmentalaffairsandtourism(Deat);
Health;and
Education.
optimiseopportunitiesandminimise
risksofregulation:and
anticipateandassesspotentialpolicyand
regulatoryimpact.
andgrowth;
labourmarketissuesregardingflexibility,skills,
minimumstandards,labourrelations;
foodstandardsandagriculturalissues;
consumercreditandprotectionissues;
education;and
transformationandtheGoodbusinessjourney.
draftingofsubmissions;
consolidationofinformation;
participationinresearch;
meetingswithgovernmentofficialsandministers;and
Nedlac.
businesspracticewithgovernment;and
revisionofprocessestobecomecompliant.
Organisedbusiness:
BUSA;
RetailersAssociation;
ConsumerCreditAssociation;and
NationalBusinessInitiative(NBI).
Inorderto:
gainsupportandleverageonissuesof
commoninterest;and
getinsightintootherbusinessandsector
approaches.
tradeandindustrypolicy;
crime;
labourmarketregulations;
textilesandclothingprocurementpolicies;
consumercreditandprotectionregulations;
and
sustainability.
ongoingelectronicandpersonal
engagement;
meetings;
negotiations;and
draftingandinputtodocumentation.
refinementandshiftingofpositionstoaccommodatebroaderinterests;
participationinBusinessAgainstCrimeinitiative;
coordinationofretailinputtotextileandclothingissues;and
participationinspecificinitiatives,forexampletheNBIsEnergyAccord.
Unionsandcollectiveemployeestructures
including:
internalcommunicationsforums;and
SACCAWUandCOSATU.
Toengageoncollectiveemploymentissues.
wagesandtermsandconditionsofemployment(UPNonly);
verificationofunionmembership;
retailissues;and
textilesandclothingissues.
ongoingelectronicandpersonal
engagement;
meetings;and
participationinCCMA,Nedlacandotherlabourmarketinstitutions.
abetterunderstandingandresponsetoemployeeconcerns;and
revisionofremunerationandbenefitspolicies.
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Media:
business;
consumer;and
trade.
Inorderto:
influencestakeholderperceptions;
buildtheWoolworthsbrands;and
marketthebusinessandproducts.
businessissues;
consumerissues;
macroeconomicissuesthataffectretail;and
productinformation.
ongoingelectronicandpersonalengagement;
interviews;
newsreleases;and
publications,includingprintedmaterialandelectronicformatonwebsites.
ongoingreviewandchallengingofbusinesspractices;
improvedtransparency;and
improvedinformationprovision.
NGOsandcommunityorganisationsincluding:
Food&TreesforAfrica;
Heartbeat;
AssociationofDieticians(ADSA);
SouthAfricanAssociationforFoodScience
andTechnology(SAAFoST);
Consumerpressuregroups;
ConsumerGoodsCouncilofSA(CGCSA);and
Environmentalorganisationsincluding:WWF,Conservation
InternationalandtheLandmarkFoundation.
Tocontributetothesocietyinwhichwetrade,
theGoodbusinessjourney;
educationandcapacitybuildingonrelevant
communityissues,forexamplenutrition;
HIV/Aidsawareness;and
inputtoourproductstrategyandrange.
ongoingelectronicandpersonalengagement;and
jointprojects.
ongoingmodificationstoproductstrategyandrange;
modificationofHIV/Aidsstrategy;and
greatertransparencyandcommunication,forexamplelabelling.
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GOVERNANCEANDECONOMIC
COMMITMENTSANDPROGRESS
Ourgovernancefocusincludesthemeasurement,governance,riskprofileandassuranceprocessaroundtheGoodbusinessjourney,andourapproachtosustainabilityreporting.
OureconomicfocusincludesourcontributiontotheSouthAfricaneconomy,localsourcing,responsiblelendingandourstoreexpansionprogramme.
WoolworthsisaproudSouthAfricanbusinesswithalongtraditionofqualityandinnovationinSouthAfrica.
Commitment 2010 2009 By2012
Netgrowthincorporatestores
9 22 31
Netgrowthinfranchisestores
(41) 3 n/a
Ethicsprogramme CodeapprovedbytheBoard.
ParticipatedinCorporateEthicsindicatormanagedbytheEthicsInstituteofSA
Draftcodeprepared.Ethicsbenchmarkestablishedinemployeesurvey
Fullimplementationandawarenessprogrammerolledout
GOVERNANCECOMMITMENT
Thegroupiscommittedtothehighestlevelofcorporategovernanceandtheimplementationofeffectivestructures,policiesandpracticesthatimprovecorporategovernanceandcreatesustainablevalueforourshareholdersandotherstakeholders.
Throughtheblendofdisciplineswithinthecorporategovernancedepartmenttheboardandmanagementaresupportedinembeddingbestgovernanceprinciplesandpracticesthroughoutthegroup.
TheboardisoftheopinionthatthegroupcurrentlycomplieswithallsignificantrequirementsincorporatedintheCodeofCorporatePracticesandConductassetoutintheKingIIReportandtheJSEListingsRequirements,andisworkingtowardsmeetingtherecommendationsofKingIII.
Thesustainabilitycommittee,aformalsubcommitteeoftheWoolworthsHoldingsboard,integratestheworkofthetransformationcommitteeandtheoutputsoftheWoolworthsTrust,providingasinglepointofviewanddirectionforallWoolworthssustainabilityfocusareas.ThecommitteeischairedbyanindependentnonexecutivedirectorandmeetsquarterlytooverseeprogressinachievingallaspectsoftheGoodbusinessjourneyprogramme.TheChiefexecutiveofficerandManagingDirector:Foodsaremembersofthecommittee,togetherwithtwoindependentdirectors,oneofwhomchairsthetransformationboardcommittee.Thecommitteehasconsideredthecontentsofthisreport.
Progresstowardsmeeting2012targetsandtherelatedoneyeargoals,ismonitoredatanoperationallevelthroughthesustainabilityandtransformationintegrationcommittee,chairedbytheChiefexecutiveofficer.Belowthis,anintegratedGoodbusinessjourneygovernancesystemisinplaceincorporatingstrategysetting,delivery,communicationandreviewofperformanceintermsoftheprogramme.
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AcompleteboardevaluationisconductedoftheWoolworthsHoldingsboardanditssubcommitteeseverytwoyears.Areportisalsopreparedonanannualbasisforeachcommitteetoconfirmthatithascompliedwithitstermsofreference.
TheGoodbusinessjourneyindexhasbeenreviewedduringthecurrentyeartoensuretheongoingapplicabilityofthesophisticatedweightedsystemwhichprioritisesall200plusindicatorsandprovidesascoreacrosseachpillaroftheGoodbusinessjourney,aswellasforeachbusinessunitinachievingtheirspecifictargets.Theindexscoreisacrucialtoolindrivingchangesinbehaviourinthebusinessunitsaswellasprovidingcomparablescorecarddataandmonitoringprogresstooneandfiveyeartargets.
PROGRESSMEASUREMENT2010
Thetotalsustainabilitymeasurementscorefor2010is84%(2009:79%).Thisshowsthatgoodprogresshasbeenmade,butthatthereareanumberofinstancesinwhichtargetsfor2010havenotbeenmet.Wehadset80%asabenchmarkforgoodperformanceandareexcitedtoscoreabovethatbenchmarkforthefirsttimesincewebeganmeasuringourprogress.
The2012scoreof67%(2009:61%)isbynecessitylowerthanthe2009score,becausemorestringenttargetsapplyformanyofthemeasures,butshowsgoodprogressthreeyearsintothefiveyearprogramme.
Thebiggestchallengesliewithinthetransformationandenvironmentfactors.
Thescoresperfactorareshownbelow.
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INTEGRATEDSUSTAINABILITYREPORTING
Woolworthsregardsitssustainabilityreportingprocessasavaluableopportunitytoengagewithitsstakeholdergroupsandtorespondtoissuesthathavebeenraised.
ThefocusforoursustainabilityreportingistoprovidereaderswithanoverviewofthecontextforhighlightsandchallengesoftheGoodbusinessjourneyprogress,aswellasourfutureobjectives.Thissustainabilityreportisthesuccessortothe2009reportandfocuseslargelyonSouthAfricanownedoperations,aswellasincludinginformationonourAustraliansubsidiary,CountryRoad,anditscorporateresponsibilityprogramme.Therehavebeennosignificantchangesinaccountingstandardsregardingsustainabilityreporting.
TherecommendationsofKingIIIandtheG3guidelinesoftheGlobalReportingInitiative(GRI)formthebasisforthisreportcycle,andananalysisofthegroupscompliancewiththeseguidelinesappearsintheGRIIndex.
ASSURANCE
WoolworthsinternalauditteamhasauditedselectedGoodbusinessjourneyindicatorsduring2010andwillcontinuethisprocesstwiceperannum.Theindicatorsformingpartoftheprogrammehavebeenclassifiedintothreecategories:
thosethatarealreadyexternallyverified; thosethatcouldbeexternallyverified/audited;and thosethatrequireinternalauditing.
ForthefinalcategorytheWoolworthsinternalauditteamhasafouryearplaninplacetocoverallindicators,focusingontheprocessesfollowedtomeasuredataandtrackchanges.
TheinternalauditframeworkhasaddedarobustoversightmechanismtotheGoodbusinessjourneymeasurementprocessandispartofaprocesstopreparethebusinessforexternalassuranceinthenextfinancialyear.
OurBEEstatushasbeenassuredbyBEEVerificationAgencyCCforthe2010financialyear.Throughtheexternalassurancereceivedfromtheagency,wehavebeenassessedasalevel5contributor.
WehavealsoundertakenalimitedexternalverificationofourcarbonfootprintdatainconjunctionwiththeGlobalCarbonExchange,andtheirassurancestatementcanbefoundundercarbonfootprint.
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KEYSUSTAINABILITYRISKS
Thekeyrisksassociatedwiththeachievementofthe2012Goodbusinessjourneytargetsandrelatedmitigatingactionswerereviewedduringthecurrentyear,andareidentifiedasfollows:
ExposureHIGH
Reasonbasedonkey
metrics
Actionstoaddressperformance
TheGBJ2012andbeyondstrategy:notbeingabletomaintainsustainabilityleadership
Keyshiftsinthesustainabilityfocusofanumberofinternationalretailers.
Woolworthsispartofthewaythroughastrategydevelopmentprocess.
Wecontinuallybenchmarklocalandinternationalretailers.
Inabilitytoachieveenergytargetsandassociatedcosts
%relativereductionfrom2004benchmarkvs.2010targetof20%
energytariffincreases
Therolloutoftechnologies(meteringonlineandautomatedlighting)hasbeenaccelerated.
Introducednewpilottechnologiesaroundrefrigerationandairconditioning.
Recentlylaunchedanenergyawarenesscampaigninstores.
InabilitytomeetFoodspackagingreductionof20%by2012andensuringfoodspackagingrecyclability
Areductionof600tonsofpackagingvs.2010targetof1000tons
Recyclingprogramavailableat8sites.
Focusingoninclusionofrecycledcontent,ensuringrecyclabilityofthecontainers,makingsurerecyclingsymbolsareoncontainers,andtheeducationofcustomersaboutrecycling,
Furtherrolloutofrecyclingfacilitiesinsecondhalfof2010.
Retainingthe
majorityofclothingsourcingintheregionreputationalrisk
Localsourcing%targetnow50%sourcingfromtheregionin2012
Workingwithkeylocalsupplierstoensureasustainablelocalvaluechaininkeylines.
IncreasingsourcingfromLesotho,SwazilandandMauritius.
Waterscarcityandqualityissues
WaterscarcitykeyissueforSouthAfricaasover90%catchmentsalreadyoverallocated.Climatechangeimpactscancreatefurtherpressuresataregionallevel
Waterneutralitycommitmentandreductionsachievedtodate.
Installingwatermetersinallstores. Workingwithsupplierstoensuretheyare
waterefficientandmanagingwastewaterproperly.
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ExposureMEDIUM
Reasonbasedonkeymetrics
Actionstoaddressperformance
InabilitytoachieveOrganicandfreerangefoodsalesandorganicclothingsales
2012targetsalesorganiccotton
2012targetsalesorganicandfreerangefood
2012farmingforthefuturetarget
2009/10targetforsustainablefibres
LaunchedtheSAorganiccottonpipeline. Investigatingthereplacementofconventional
cottonwithbetterorfairtradebasedcotton. Increasingtheinclusionofothersustainablefibres
suchasbambooinproductmix. Promotingfarmingforthefutureproduceand
earthfriendlycleaningrangeasnewproductinnovationcommitmentsthatarefundamentallychangingourproductoffering.
Dataintegrity:
Anumberofthe
GBJmeasureshadnotpreviouslybeenmeasuredbythebusiness.
TheonlineGBJmeasurementsystemhasbeenimproved.
ThefinalisationoftheMeteringonlinetechnologyhasimproveddataaroundenergyandwater.
AthreeyearauditplanforGBJisinplace,withaviewtopreparingthebusinessforexternalassurance.
ExposureLOW
Reasonbasedonkeymetrics
Actionstoaddressperformance
Internal financial
constraints:
AfocusoncostreductionhasresultedinsomeGBJinitiativesnotbeingpursuedbythebusiness.
Costsavingprojectsaresubmittedtotheinvestmentcommitteetosecurefunding.
Broaderbusinesscasedevelopmentforotherprojectsisbeingpursuedwiththebusinessunits.
ExclusionstotheGoodbusinessjourneyprogramme:Brandedproducts
ToensureconsistencyandcredibilityoftheGoodbusinessjourneyprogramme,allaspectsofWoolworthsbusinessshouldbeinvolved.
Investigatinghowtoincorporatebrandedproductswithintheambitofthesuppliercodeanditsauditprocess,toensurealevelofconsistency.
Opportunitiestopartnerwithbrandsonsustainabilityissuestobeinvestigated.
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Competitioncommissioninquiry
Woolworthsiscommittedtofaircompetitionprinciples.
TheretailindustryinSouthAfricaandaroundtheworldisfiercelycompetitive.Weareatpainstoensurethatourpracticesdrivethebestpricesforourqualitystandards.
WoolworthswillcontinuetocooperatewiththeCommissionandawaitstheoutcomeofitsinvestigation.
VALUESANDETHICS
During2009sustainabilitybuildforabetterfuturewaslaunchedastheseventhWoolworthsvalue,entrenchingitsimportanceintheculturalfabricoftheorganisation,andjoiningqualityandstyle,value,service,innovation,integrityandenergyasthecompassfordecisionmakingatWoolworths.
TherevisedWoolworthscodeofethicswasalsoapprovedduring2010.
WoolworthsparticipatedinacorporateethicsresearchprogrammerunbytheEthicsInstitute.Furtherinternalawarenessandresearchwasdoneviaastaffcultureandvaluessurveythatsetabenchmarkforethicsawareness,againstwhichimprovementtargetshavebeenset.
Asacompanywehaveazerotolerancepolicytowardsfraud,theft,corruptionoranysimilarillegalbehaviour.
Fraudandshrinkage
Wewilltakedisciplinaryactionagainstanyemployeewhoisinvolvedin,orassistswithcommittingfraud,theftandcorruption.Intermsofthecompanysdisciplinarycode,involvementintheseactsisadismissibleoffence.WecontinuetopromotetheTipoffsAnonymouslinerunbyDeloitteandtherewardsforinformationwhichleadstosuccessfulpreventionsoffraudandshrinkage.
CONTRIBUTIONTOTHESOUTHAFRICANECONOMY
WoolworthscontinuestocreatewealthacrossabroadspectrumoftheSouthAfricaneconomy,atthemostfundamentallevelbygeneratingdirectemploymentandcareeropportunitiesforover20000peopleandindirectly,manymorethroughourmanufacturingandprocessingnetworkaswellasassistingtobringsmallscalesuppliersintothevaluechain.
Woolworthshasdoneacountryoforiginassessmentinordertoconfirmthat95%ofthefoodthatitsellsisSouthAfricaninoriginasignificantcontributiontotheSouthAfricaneconomy,especiallytheagriculturalsector.
Woolworthsreiteratedthecompanyscommitmenttobuyingasmuchproductlocallyaspossible.Thevastmajorityofgoodssoldinourstores,byvolume,aremanufacturedinSouthAfricaandwecontinuetoencouragelocalmanufacturingwhereverpossible.
Wewillonlyconsidersourcingabroadwherelocalorregionalsupplierpartnersareunabletoprovidetheidealquality,valueandinnovationthatourcustomersexpect.
Woolworthsisalsowellplacedtodriveenterprisedevelopmentprojectsandhassetupteamsdevotedtoworkingmorecloselywithemergingsuppliers,furthersupportingSouthAfricanbusinessesfirstasacrucialpartofourindirecteconomiccontribution.
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Woolworthsexpansionprogrammehasmovedtoafocusonstoreextensionsandmodernisations.WeareintroducingtheconceptofasuperwooliesinFoodthroughconvertingandexpandingexistingstores,whichwillofferacomprehensivecatalogueoffooditemsaswellashouseholdandhomebasics.
Thecurrentfootprintincludes:378stores
Woolworthscontinuestosupport160franchiseoperationsinSouthAfrica,selectedAfricancountriesandtheMiddleEast.
AdetailedreviewoftheWoolworthsgovernancestructureandprocessescanbefoundinthegovernancesectionofthe2010annualreport.
CaseStudyCreatingjobsanddrivingeconomicdevelopmentRecruitmentconsultantandentrepreneurCikizwaNqolobesayssheoweshersuccesstoWoolworthseffortstoempowerblackandblackwomenentrepreneurs.NqolobecutherteethinWoolworthsHRdepartment,andthenin2006tooktheplungetostartherownrecruitmentconsultancy.ShewasappointedasapreferredsuppliertoWoolworthsandidentifiedasoneofWoolworthsenterprisedevelopmentprogrammebeneficiaries.CikizwaofIndimaRecruitment,says,ItsbeenaquitearidefromGugulethutowhereIamtoday.Woolworthshasreallybeenamazing,firstasanemployerandthenasachampionofmyentrepreneurialjourney.Woolworthsisadedicatedclient,financialsponsorandbusinessadviserallrolledintoone.ImeetwiththemonaregularbasistodiscussIndimasprogressandplanstogrowandsustainmybusinessintothefuture.ZinziMgolodela,WoolworthsHeadofTransformationsays,Aswedowithothercarefullyidentifiedaspiringentrepreneurs,webeganbyhelpingNqolobedrawupacomprehensivebusinessplanthatclearlymappedherbusinessgrowth.Thenwefocusedonensuringshehadthebusiness,tools,skillsandsupportnecessarytotakeoffasastartupbusiness.Wecontinuetostandbyherasshegrowsherbusiness.Wereextremelyproudofhowhardshesworkedandhowwellshesdone.AnillustrationofhersuccessisthatoverthecourseofayearIndimagrewfrommanaging5toover20contractorsintheITsector(75%growth).
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VALUEADDEDSTATEMENT
2010 2009
Valueadded23,744
22,372
Less:Costofsales15,656
14,501
Costofservicesandotheroperatingexpenses
2,888 2,706
5,200 5,165
Distributionofwealth: % %toemployeesassalaries,wagesandotherbenefits
2,858 55.0% 2,689 52.1%
togovernmentasincometax(includingdeferredtax) 491 9.4% 546 10.6%tolendersasfinancecosts 151 2.9% 281 5.4%toshareholders 718 13.8% 1,399 27.1%depreciationandamortisation 442 8.5% 401 7.8%earningsretained 540 10.4% 151 2.9%
5,200 5,165
2010
55%
9%
3%
14%
9%
10%
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TRANSFORMATIONANDCSICOMMITMENTSANDPROGRESSCommitment 2010 2009 By2012
OverallBEElevel Level5(56.93) Level6(46.5) Level4(65+)
Equityownership 3.57 4.7 6.5
Managementcontrol 9.03 7.3 8
EmploymentEquity 10.59 9.8 11
Skillsdevelopment 10.25 7.7. 15
Preferentialprocurement 10.44 5.7 13
Enterprisedevelopment 8.05 6.3 11
Socioeconomicdevelopment 5 5 5
TotalCSIcontribution R314m R292m R300m
Surplusproductdistributed R283m R262m N/A
EducatorsbenefitingfromtheEduplantprogramme
8000 5000 N/A
ThetransformationpillaroftheGoodbusinessjourneyembracesthedtisbroadbasedblackeconomicempowerment(BBBEE)scorecardframework,including:equityownership,managementcontrol,employmentequity,skillsdevelopment,preferentialprocurement,enterprisedevelopmentandsocioeconomicdevelopment.BBBEEisoverlaidontheWoolworthsstrategytoensuremeaningfulandsustainableempowermentendeavours.ToenabletheimplementationofBBBEE,Woolworthstookanintegratedandmultiprongedapproachtoshiftingtheorganisationalculture,mainlydrivenbychangeleadershipinitiatives.
TheBoardtransformationcommitteeassiststheBoardinensuringthatthereareappropriatestrategies,policiesandprocessesinplaceinordertodrivetransformation.
BEEVerificationAgencyCCwasappointedasthecompanysverificationagencyforthe2010financialyear.Throughtheexternalassurancereceivedfromtheagency,wehaveachieveda56.93%score,alevel5achievement,improvingfrom46.5%inJune2009.
DetailsontheindividualsectionsoftheBEEscorecardfollowbelow.
BEEEMPLOYEESHAREOWNERSHIPSCHEME
TheBEEemployeeshareownershipschemewasestablishedinJuly2007toacceleratetransformationinitiativesbyspreadingequityownershipmorebroadlyacrossWoolworths,transferringa10%holdingtoWoolworthsemployees.Theschemealsoprovidesaretentionincentivetoemployees.
Aboardoftrustees,withamajorityofemployeerepresentatives,hasbeenestablished,chairedbyDollyMokgatle,andthetrusteesmettwiceduringtheyearwithfullattendanceatbothmeetings.ThetrusteesexercisedthevotingrightsofthepreferencesharesatallthegeneralmeetingsheldbyWoolworths.Duringthe
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yearthetrusteesalsoheldtheirfirstImbizoforbeneficiaries,whichwaswellattendedandwhichreceivedverypositivefeedback.
EmployeeturnoverintheretailsectorandamongstemployeesbenefitingfromtheBEEemployeeshareownershipschemehadadverselyaffectedtheWoolworthsownershipstatus,buthasdecreasedsignificantlyinthelastfinancialyear.AttheendofJune2010,therewere8706beneficiariesparticipatinginthescheme.
OurBEEemployeeshareownershipschemeearnedapercentageofthedividendspaidouttoordinaryshareholdersandduringtheyearthebeneficiariesoftheschemereceivedR16.3m,anincreaseof67%onthepreviousyear.TheschemehaspaidatotalofR37.8mindividendstodate.Thefullbenefitsoftheschemebecomeduein2015.
MANAGEMENTCONTROL
Woolworthscontinuestofocusonrepresentivityofblacknonexecutivedirectorsandseniorexecutivesthroughsuccessionplanningandtalentmanagementprocessesandthemanagementcontrolscorehasimprovedfrom7to9.03accordingly.
EMPLOYMENTEQUITY
DiversityofworkforceandcompliancewiththeEmploymentEquityActarecriticalforthetransformationofWoolworths.Thisisembeddedandalignedtothebusinessstrategy,successionplanning,talentmanagementprocessesandemployeeengagement.
DuringtheyearWoolworthswentthroughaDirectorGeneralreviewofemploymentequityprogresswiththedepartmentofLabour,whichhighlightedtheneedtofocusonAfricanrepresentationatseniormanagementlevelanddisabilityrepresentation.
TherehasbeenextensiveworkdonetoensureintegratedandsustainableEmploymentEquity(EE)Actcomplianceacrossthebusinessviadiversitycommitteesinallbusinessunits.
Thesecommitteesaremeeting,onaverage,onamonthlybasis.Themandateofthesecommitteeshasbeenwelldefinedthroughongoingtrainingofdiversitycommitteemembers;LetsTalk!isasuccessfulengagementmethodologyatalldiversitycommitteemeetingstoensurecompliancewiththeEEAct.SomeofthemajorbenefitsoftheLetsTalk!methodologyareeffectiveengagement,escalationofEEissues,drivingaccountabilityandensuringatwowayfeedbackprocess.ThecontinuousimprovementofIntegratedPerformanceManagement(IPM)hasnowseenBEEand/ortransformationincludedinindividualemployeesperformancegoals.Individualgoalscoupledwithaneffectivetrackingandmeasurementcapability,contributeinembeddingBEEasawayofworkingthatisintegraltobusinessstrategy.
SKILLSDEVELOPMENTTRAINING
Ourlearninganddevelopmentfocusisondevelopingandbuildingcompetencerelatingtobothleadership/managementandtechnicalorfunctionalskills.Learninganddevelopmentcontinuestobeakeyenablerforthedevelopmentofablacktalentpipelineforkeyrolesinthebusiness.
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WoolworthsdriveslearninganddevelopmentthroughtheWoolworthsAcademyframework,whichisstructuredinawaytoguideeachlearnertoundertakeapathofprogressivelearning,andincludes:
775employeesareonaccreditedlearnershipprogrammes(4%oftotalemployees),leadingtoanationalqualificationregisteredwiththeSouthAfricanQualificationsFramework.Thishasincreasedfrom366employeesin2009;
6AccreditedSkillsprogrammesarerunningthroughSupplyChainandFoods;and 5Traineeprogrammesacrossthebusiness.
Skillsdevelopmentperformancehasimprovedagainst2009,butisstillunderperformingagainsttheWoolworthstargetfortheyear.
Totalspendonblackemployeesincreasedsignificantlyfromthelastfinancialyear.
PREFERENTIALPROCUREMENTANDENTERPRISEDEVELOPMENT
Woolworthsiscommittedtosupportingexistingsupplierstoimprovetheirempowermentcredentialsandintroducingsmall,medium,blackownedandblackwomenownedsupplierstothebusiness.
Thepreferentialprocurementscorehasimproveddramatically(5.7to10.44thisfinancialyear)duetofocusedeffortsbythebusinessunitstogetholdofsuppliercredentials,wellstructuredcentralprocurementRFPprocesseswhichemphasiseBEEcredentials,andsupportforsuppliersintheirownverificationprocesses.
WoolworthsEnterpriseDevelopmentstrategicaimsaretoaddressthechallengesfacingsmallblackownedbusinessesbyassistingthesebusinessesinmovingfrombeingsurvivalisttobeingsustainable.Keytothisisprovidingtheseenterpriseswithbusinessopportunities.
Furthermore,inlinewiththeWoolworthsstrategyofbuildinglongtermrelationshipswithitssuppliersandpartners,wefocusourEDeffortsonemergingorganisationsinourgreatersupplychain.Woolworthsenterprisedevelopmentstrategyrestsonfourpillars,allofwhichwebelieveareessentialtohelpanemergingentrepreneurorsmallbusinesstogrowintoasustainableentity.
Thefourpillarsarefinancialassistance(includingshorterpaymentterms),guaranteedbusiness,apackageofsupportwhichincludesmentorship,targetedupskillingandtheassistanceofexternalexperts.InordertobeabletodeliverthemaximumbenefittoourEDbeneficiarieswewillpartnerwithorganisationsthatcanfurthercomplementourcontributions.CurrentlyWoolworthshaspartnershipswith:
OldMutualMasizaneFundandIlimaConsultants.ThisisadevelopmentinitiativesetupbyOldMutualaimedatsupportingnationaleconomictransformationthroughenterprisedevelopment,withafocusonwomenownedbusinesses;capacitybuilding&skillsdevelopmentandfinancialeducation.
saiblSouthAfricanInternationalBusinessLinkages.Thisisabusinesslinkageprogrambuildingthecompetitivenessofblackenterprisesthroughimprovementsinmanagement,productivityandquality,anduseofmoderntechnology,andlinkingthemtodomesticandinternationalmarketsinsustainablebusinessrelationships.
Variousindependentconsultants.
Inthecurrentyearwehaveassisted32(2009:25)blackownedcompaniessupplyingproductsandservicestovariousbusinessunits.
WeseeourEDstrategyasaninvestmentinthefutureofourbusinesssupplychain,thewidereconomyandthesocietyinwhichweoperate.
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CaseStudyClothingbankTheClothingBankwasestablishedbytwolikemindedandaccomplishedwomenin2009.TraceyGilmoreandTraceyChambersshareapassionformakingarealandmeaningfuldifferencetothelivesofimpoverishedwomenwithinSouthAfrica,anditwasthiscommitmentthatdrovethemtoestablishTheClothingBankcreatingaseamlesssupplychainbeentheretailindustryanddisadvantagedcommunities.TheannualclothingexcessintheSouthAfricanretailindustryisestimatedatavalueofR200R900million.Theseexcesses,whicharenormalintheretailindustry,couldbeusedefficientlytobenefitNPOs,disadvantagedcommunitiesandtheirpeople.OnceintroducedtoTheClothingBank,Woolworthsimmediatelyunderstoodthevaluethatitcouldbringbysupportingthesesocialentrepreneurs(currentlyover60womenareinvolvedintheprogramme).WoolworthsdonatedR5millioninclothingforthefirstyear(2010).WoolworthsiscommittedtohelpingTheClothingBank,andisdoingsothroughitsdedicatedEnterpriseDevelopmentdivision.HowtheClothingBankoperates TheclothingcollectedbytheClothingBankismanagedinthreeways: Soldtotheunemployedwomenintheirtradertrainingprogramme. GiventopartnerNPOs,welfareinstitutionsandgovernmentalserviceswhoidentifytheneedsofcommunities
atgrassrootslevel. Storedandutilisedtoensureimmediateresponsefordisasterrelief.
CaseStudyEnterprisedevelopment:StrandveldteaWoolworthscontinuestodemonstrateitscommitmenttosocioeconomictransformationandspecificallyBroadbasedBlackEconomicEmpowerment(BBBEE)inSouthAfricabysupportingsmall,local,communitybasedenterprises.OneofthelatestprojectstobenefitistheStrandveldTeaFarmersAssociation,whichisnowgrowingpremiumfinerooibosteaforWoolworths.ItsoneoftheprojectsthathasgrownoutofthepartnershipbetweenWoolworthsandtheShellFoundation,aU.K.basedcharitythattacklesglobaldevelopmentchallengesbyhelpingsmallbusinessesinpoorerregionsaroundtheworld.WithTheBetterTradingCompany,ShellFoundationsdevelopmentpartners,astudywascommissionedthatshowedrooibosproductionwouldhavelessimpactrelativetootherfarmingactivitiesintheElimarea,italsosuggestedwaysinwhichrooibosfarmingcouldrestorebiodiversityinareasalreadyimpactedbyalienvegetation.Theintroductionofrooibosfarmingisalsohavingapositiveeffectonthelocalcommunity,whichwasestablishedasaMoravianMissionStationin1824,isstillasmall,picturesquecountryvillagewhere,untilrecentlymosteconomicactivityrevolvedaroundsubsistencefarmingandthethatchingtrade.Theystartedsmall,plantingonly10hectaresin2006,expandingto20thefollowingyear,thendoublingthatagaintheyearafter.Injustfouryearstheirhardworkwithassistanceintermsofinvestmentandtechnicalexpertisehaspaidoff,astheprojectproducesexportqualityrooiboswhilecreatingjobopportunitiesandgeneratingrevenueforthepeopleofElim.Itsalsobenefitingtheenvironment,asthefarmersremovedensealienbushwhenplantingrooibos.Therooibosinhibitsregrowthofthealiens,butnottheindigenousfynbos.Inordertopreservethefynbos,planting,weedingandharvestingoftherooiboscropisdonebyhand.Inadditiontocultivatingrooibos,localfarmershavealsofoundemploymenthelpinganearbyfarmerharvestfynbosforexport.
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CSITheWoolworthsCSIstrategyisalignedbothtoourcorebusinessstrategyandtothestatednationaldevelopmentprioritiesoftheSouthAfricangovernment.
Akeyfocusofallthetrustsactivitiesistobuildcapacityinourcommunitiestoencourageandsupportourbeneficiariesinbecomingselfreliant.Inparticularwearecommittedtocontributingtoeducationbyaddressingfoodsecurityandnutritionandtheneedsoforphansandvulnerablechildren.TheWoolworthsTrustismanagedbyaboardoftrusteeswhooverseeourcoreactivitiesinlinewithourCSIpolicy.
SURPLUSFOODANDCLOTHINGDONATIONS
WoolworthsiscommittedtousingitssurplusproductstocontributeineradicationofpovertyinSouthAfrica.Eachyear,WoolworthsgivesawaymillionsofrandsworthofitsclothesandsurplusfoodtounderprivilegedSouthAfricans.ThesurplusfoodispastitsSellBydatebutbeforeitsBestBeforeandUseBydates.MostsurplusfoodandsomesurplusclothingaredistributedbyWoolworthstolocalcharities.
R279mworthofgoodsweredonatedbyWoolworthstoneedycharitiesin2010(2009:R262m).Note:Thesefiguresrepresentthecosttocompany,nottheretailpriceoftheitems.
FOODSECURITYINSCHOOLS
ThroughourmajorsponsorshipoftheEduPlantprogrammewe,togetherwithAbsaandEngen,assistSouthAfricanschoolsindevelopingpermaculturefoodgardens.In2010,8000educatorsbenefitedfromparticipatingintheEduPlantprogramme,coordinatedbyFood&TreesforAfrica.ThisistheTrustsflagshipfoodsecurityandeducationalinitiativeandprovidessustainablefoodsecuritythroughfoodgardenstoschoolcommunities.TheprojectcurrentlyreceivesinexcessofR1.5mayearfromtheWoolworthsTrust.
ThroughtheEduPlantprogramme,schoolsdevelopfoodgardensusingpermaculturetechniques.Inharmonywithnature,EduPlantschoolsgrowvegetables,fruit,herbsandmedicinalplants.Theseschoolsprovidefoodforhungryschoolchildrenandthecommunitiesaroundthem.
ThroughtheirparticipationintheEduPlantprogramme,thousandsofschoolsacrossthecountryhavebecomechampionsofcommunitydevelopment;promotingfoodsecurity,improvednutritionandselfreliance.
Inthesecondhalfof2010Woolworths,togetherwithABSA,willbefundingapilotprojectinSiyakhanafoodgardeninBezuidenhoutparkinJohannesburg.TheSiyakhanaFoodgardenisaprojectoftheUniversityofWitwatersrandandithastheobjectiveofimprovingavailabilityandaccessibilityofnutritiousfoodandprovidingeducationtothesurroundingcommunitiesonproducingtheirownfood.
RecordnumberofEducatorsreachedthroughEduPlantworkshopsandrecordnumberofEduPlantentriesin2010
The2010EduPlantworkshopshavebeenagreatsuccess.ThisyeartheprogrammewelcomesEngen,AbsaandtheWoolworthsTrustasthefundingpartners.Theyaregrowinganddevelopingthisnationalschoolgreeningandfoodgardeningprogramme,foundedandcoordinatedbyFTFA,thatisnowinits16thyear.
Arecordnumberofover8000delegatesattendedthe72educatorworkshopsrunacrossSouthAfricaandarecordnumberofover580schoolshavesubmittedentryformsforthecompetitionthisyear.
00100579Sticky NoteNothing measurable or comparable.Is more of a story.
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IMPROVINGEDUCATION
ThroughMySchoolandMakingtheDifferencethroughDesignandMakingtheDifferencethroughNutrition,WoolworthscontributestotheimprovementofeducationinSouthAfricanschools.
WehavecontributedmorethanR100mtodatetoMySchoolonbehalfofourcustomers.In20092010alonewecontributedR27mtotheMySchoolprogrammethroughover500000activeMySchoolsupporters.Thecontributionshavesupportedmorethan10000schools,manyinimpoverishedareasaroundthecountry.
TheprojectalsoincludesMyVillageandMyPlanet,whichsupportselectedcharitiesandenvironmentalorganisations.
Atotalof1900schoolsarebenefitingfromWoolworthsMakingtheDifferencethroughNutritionorDesignschoolinitiatives.In20092010WoolworthsextendedtheMakingtheDifferenceprogrammetoincludeclasslessonsfocusingonnutrition,exerciseand"FarmingfortheFuture".
ORPHANEDANDVULNERABLECHILDREN
TheWoolworthsTrustiscommittedtoplayingaroleinthenationalefforttosupportorphanedandvulnerablechildreninSouthAfrica.Webelieveinstrengtheningfamilies,communitiesandschoolcommunitiessothattheyarebetterabletocareforthem.
TheWoolworthsTrustpartnerswithHeartbeattopromoteandenablecommunitycarefororphanedandvulnerablechildren.3000orphanedandvulnerablechildrenareabletostayintheirowncommunitiesasaresultofHeartbeat.
During2010wecontinuedoursupporttotheEmthonjeniareainMpumalangaandenteredthesecondyearofaprojectintheJoziniareaofKwaZuluNatal.Theprojectwillprovide12nongovernmentalorganisations(NGOs)withtheopportunitytoparticipateinatrainingandmentoringprogrammewithHeartbeatovera24monthperiod.TheobjectiveistoenabletheseNGOstoprovidethenecessarysupporttotheorphanedandvulnerablechildreninthisparticularlyneedyarea.ItwillextendthereachofHeartbeattoafurther2000childreninthisarea.
STAFFGIVING
Woolworthsstoresareencouragedtosupportsocialdevelopmentprojects,schoolsandcharitiesintheirlocalcommunities.TheWoolworthsTrustmatchesthefundsraisedbystoreswithcontributionsofuptoR4000perstoreperyear.Inaddition,storeshavetheirowncommunitygivingprogrammesdistributingsurplusfoodandclothestolocalcharities.ThroughWorkingWonders,anemployeerecognitionprogrammeforcommunitywork,Woolworthsalsoencouragesandsupportsemployeeswhoareinvolvedinmeetingsocialchallengesintheircommunities.
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CaseStudyWorkingwonderswinners:
JamaKatanganaisbeingrecognisedbecauseofhisdedicationandcommitmenttotheorganisationNants'Ingqayi(NAD).TheorganisationhelpstoenrichthelivesofthecommunityofLanga.NADhelpsenrichthiscommunitybysupportingallkindsofartsactivitiesfromtheatretocommunityjazzjams.Theyprovideskillsaswellashelpingyoungandoldexpressthemselvesartisticallyand,throughthat,toleadbetterlives.Jamaspendsagreatdealofhisfreetimeworkingwiththemandmakessurethatitreachesasmanypeopleaspossible.HehasrecentlybeenveryinvolvedinenablingagroupofchildrenfromNADtoprovideentertainmentalongthefanwalkaspartoftheWorldCupactivities.InadditiontothewonderfulworkthatJamaisdoinginhiscommunityheisalsoawonderfulassettohisdepartmentandasstatedbyhislinemanager'HeisarealWoolworthsambassador,whogetsinvolvedwherehishelpisneededwithoutanyexpectationofremunerationorreward.'
ArleneNewmanisbeingrecognisedbecauseofherdedicationandcommitmenttomakingadifferenceinthelivesofmanyanimalsandinparticularforhersupportandinvolvementwiththeorganisationAdoptAPet.Shecollectspetfood,towels,blanketsandmonetarydonationsfromherITcolleaguesforAdoptAPet,aswellasbooksforTheEmmaAnimalRescueSociety(TEARS).Shebelievesstronglythatanimalscannothelpthemselvesandtheyhavesomuchlovetogiveandalltheyaskforinreturnislove,awarmbed,foodandwater.HerworkspaceisusuallysurroundedbylargebagsoffoodandbooksthatshehastocallAdoptAPettocomeandcollectfromher.ArleneisnotonlymakingadifferencetoAdoptAPetsheisalsoawonderfulassettoherdepartmentandagreatWoolworthsambassador.
CaseStudyHabitatforHumanityBuild
InNovember2009Woolworthshelditsfirstannualcharitytriathlon.Manystaffmembers,theirfamiliesandoursuppliersran,swamandcycledtoraisemoneyforHabitatforHumanity.HabitatforHumanityInternationalisanonprofit,housingorganizationthatoperatesasaworldwideministryseekingtoprovidesimple,decentandaffordablehousingtocommunities,inneed,throughouttheworld.
From1216April2010WoolworthsteamsbuilteighthousesforfamiliesinMfuleniTownship,CapeTownfromthefundsraisedbythetriathlon.ThesecondcharitytriathlonwilltakeplaceinNovember2010.
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SOCIAL
COMMITMENTSANDPROGRESS
Commitment 2010 2009 By2012Numberofemployees 18977 17551 n/aConversionofparttimerstoflexible40hours 36% 16% n/aUnionmembership 26% 30% n/aLabourturnover(Management) 13% 12% 10%Numberofinjuriesonduty 693 551 n/aFullcompliancewithsuppliercode:Foods 95.5% 94% 95.5%Fullcompliancewithsuppliercode:Clothing 89% 84% 90%OursocialpillarincludesafocusonWoolworthspeopleinitiatives,socialconditionsinoursupplybase,productlabelingandhealthandsafety.
PEOPLE
Woolworthsisanaspirationalandmodernretailbrandwithastrongvaluebasedculturethatpermeatesemployeerelationsandassiststodrivehighperformance;thereforeweareabletodeliversustainableandprofitablegrowththroughourPeople.
Ourintegratedpeoplestrategy,whichisbuiltonthephilosophyofcreatinganinspiringworkplace,isthefoundationofthecompanystrategicplanandiscriticaltomotivatingandrewardingtherightemployeeactionsandbehaviourinordertoeffectivelyexecutebusinessplans.
TheobjectivesofthePeopleStrategyare:
Tobuildemployeeengagement; ToestablishnonnegotiablecommitmenttoEE; Todevelopcapability,successionandcareerpathways; Toestablishaperformancemotivatedculture; Toenhancevaluesbasedleadership;and Toattractoutstandingtalent. In2009/10wemadesignificantstridestowardsestablishingaleadingemploymentvaluepropositionthroughtheimplementationofanintegratedpeopleandrewardstrategy.Thekeyachievementsfor2009/10were:
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StoreStaffEmploymentProposition
Prospectiveandcurrentemployeesareattractedandretainedbythevaluebasedculturewhichformsthebedrockofthebusiness.Fromthefinancialyear2008/2009to2009/2010staffturnoverincorporatestoresdecreasedby8%asaresultoftheimprovementsmadeinstrengtheningthestaffemploymentvalueproposition,whichincluded:
Increasingstabilitythroughensuringmoreguaranteedhoursforourstorestaff.Thiswasachievedthroughtheconversationofflexible28hourcontractstoflexible40hourcontracts.Onthe30thofJune2010,37%ofstaffwereconvertedtoflexible40contracts.
Successfullytriallingavariablepayschemein4storesforallstorestaff.TheschemehasbeenimplementednationallyasatJuly2010.
MergingtheAlexanderForbesprovidentfundwiththeWoolworthsGroupRetirementfundallowingapproximately4000staffemployeesincorporatestorestoreceivethesamegroupriskbenefitsincludedintheWoolworthsGroupRetirementFund,
Increasingthefuneralbenefitatnoextracosttotheemployees.
ShortTermIncentives
Shorttermincentivesincludingthecorporateshorttermincentivescheme,theregionalmanagerandcorporatestoresgainshareschemeandthesupplychaingainshareschemeperformedasplannedrewardingparticipantsforsuccessfulperformance.
Employeeengagement
Woolworthsemployeerelationsstrategyremainsfocusedondevelopingandmaintainingsoundoneononerelationshipswithallstaff,whichwefirmlybelieveisinthebestinterestsofourpeople.IndustrynormsarereviewedonaregularbasistoensurethatWoolworthsremunerationremainscompetitiveandmarketrelated.
LetsTalkisanengagementtoolthatprovidesemployeeswiththeplatformtobeheardandtotrackdailyactionsrelativetotheoperatingandtradingplan.Asatyearend80%ofheadofficeandover50%ofstoreshaveimplementedthemethodologywhichhastranslatedintoimprovedperformance.
PeopleSurvey
TheemployeeopinionsurveyknownasLetsAskwasdeployedinstorestomeasureengagement,theeffectivenessofourpeoplestrategiesandleadership.Overalltherewas2.1%improvementinperformance.Notableshiftsincluded
3%improvementinCulture&Leadership 3%improvementinStakeholderEngagement: 8%improvementinReward&Recognition:
Recruitment
Overthepastyearasolidplatformhasbeenestablishedfromwhichwecanbuildourpositionasthepreferredemployerwithinretail.Afullreviewofrecruitmentandselectionpolicy,processandmetricshasbeencompletedandtherehasbeenafocusonbuildingrecruitmentandselectioncompetenceinHRandLineManagers.Thedevelopmentofalternativesourcingchannelshasalsocontributedtoasignificantdecreaseinrecruitmentcostsacrossthebusiness.
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HeadOfficeRestructure
Inordertopositionthebusinesstoeffectivelydeliverthestrategygoingforward,anorganisationwidestructurealignmentprocesswascompletedatheadoffice.Thekeyoutcomesofthisprocessweresimplerleanerstructures,withclearaccountabilityalignedtothedeliveryofthebusinessstrategy.Theintentwasalsotostructuretobuildsuccessionandincreasedcapability.Keyfocusareasthroughthestructurealignmentprocessweretheretentionofkeyskillsandcommitmenttoemploymentequity.
EmploymentEquity
Employmentequityhascontinuedtobeakeybusinessfocusin2009/10withaspecificfocusonestablishinganEEtalentpipelineinlinewithourstrategyofdevelopingandprogressingEEtalentthroughthebusiness.Thelaunchofourgraduateprogramme,GrowthAcademy,incollaborationwiththeW&RSSetaandtheUniversityofStellenboschBusinessSchoolinFebruary2010wasgroundbreakingwithintheretailsector,andisasignificantsteptowardsenablingthisstrategy.Inordertobuildaculturethatenablestransformation,anewDiversityworkshopwaspiloted,andwillberolledoutacrossthebusinessinthenewfinancialyear.
SkillsDevelopment
DevelopmentoftherequisiteskillstodeliverourstrategybothintheshortandlongertermremainedakeyfocusareaforthebusinessandthenumbersoflearnersparticipatinginformalisedLearnerships,SkillsprogrammesandTraineeprogrammeshasincreasedsteadily.ThelaunchoftheGrowthAcademyaswellasaCorporateStoresandRealEstateDevelopmentCertificateinBusinessPracticefundedbytheW&RSetaandruninpartnershipwiththeTripleLLearningAcademywerehighlightsfortheyear.RetailAcademy,whichfocusesonthedevelopmentofmiddletoseniormanagement,continuedtoruninpartnershipwithUCTGraduateSchoolofBusiness.Inaddition,therewasalsoacontinuedfocusongeneralupskillingandbuildingofretailmerchantskills.ThelearningcentresatAdderleyStreetinCapeTown,RosebankinJohannesburg,andWestvilleinKZNhaveallcomeonstreamtoacceleratethedevelopmentofretailskillsbyprovidingfocusedandaccreditedcoursesrequiredformodernretail.
SUPPLIERRELATIONS
Alloursuppliers,serviceprovidersandfranchisees,whatevertheirlocation,areboundbytheWoolworthsCodeofBusinessPrinciples.Alloursuppliersareregularlyassessedagainstit.
Thismeansthatthequalityoftheirworkmanshiphastobethehighest,theirworkforcehastobetreatedfairly,andthatanynegativeimpacttheiroperationsmighthaveontheenvironmentisminimised.
Clothings2010compliancetargetwas90%,but89%wasachieved,agoodimprovementfrom2009,butstillslightlybelowourobjective,largelyduetochallengesintheengagementofinternationalsuppliers.
Foodtargeteda95%compliancewiththesuppliercodeofBusinessPrinciplesfor2010andachieved95,5%complianceoveratwoyearauditcycle.
The2010winnersareFairCapeandBakkavor
Bakkavorisreceivinganawardfortheirwatersavinginitiatives,theirecofriendlywaterheatinginstallation,andtheuseoffilteredfactorywastewatertoirrigatenearbyfarmland.
FairCapeisreceivinganawardfortheircarbonfootprintingstudy,andfortheirplantorecoverfatsandoilsfromtheirwastewatertogeneratepower.
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CaseStudyWooliesrecognisessuppliersfortheircommitmenttoprotectingtheenvironmentTheStewardshipAwardswerecreatedtorecogniseWoolworthssupplierswhoaretakingtheleadinusingnaturalresourcesefficientlyandwhoarehelpingtobuildpeopleandcommunities.Toenter,thesupplierssubmitareportoutliningtheirenvironmentalandsocioeconomicperformanceandentriesarereviewedbyapanelofenvironmentalexperts.
PRODUCTSAFETYANDLABELING
Woolworthsiscommittedtomaintainingthehighestpossiblelevelsofproductsafetythroughoutthebusiness.Productdesignandmanufacturearealwaysassessedagainststringentsafetystandards.
Foodsafetyiscriticaltothebusinessandmechanismsareinplacetoensurethatconsumersareofferedproductwhichhasundergonethoroughtestingandrigidprocesscontroltoensureitisassafeaspossible.Processesincluderoutinechecks:
theWoolworthsappointedindependentSANAS(SouthAfricanNationalAccreditationSystem)accreditedfoodlaboratoryrunsroutinechecksforanypotentiallyharmfulmicroorganismsandpathogens.Italsoroutinelymonitorspesticideresiduelevelsonfreshproduceandheavymetallevelsinfreshfish;and
anindependentauditingorganisation,InternationalBritanniaLimited(IBL),conductsfourhygieneauditsayearineachofourstoreswherefoodiscookedtoensurethatgoodfoodhandlingroutinesareinplace.
Woolworthshasarobustproductrecallprocessinplace,wherebyproductsposingasafetyriskareremovedfromtheshelfwithintwohoursoftherespectiveexecutivebeingmadeawareoftherisk.
Woolworthslabellingpolicyensuresthatcustomersaregivensufficientaccurateinformationtoallowthemtomakeinformedbuyingdecisions.Woolworthsclothingisfullycompliantwithgovernmentrequirementsintermsoflabellingwhich,inadditiontolistingthecountryoforigin,requiredetailsoffibrecontentandcareinstructionsplustheimporterscodeforimportedlinesorthemanufacturerstaxpayernumberforlocalgoods.
AllWoolworthsfoodlabelscontaindetailedinformationoningredients,nutritionalvaluesandallergens.WoolworthshasanopinpolicyinKidswear,toensurewekeepchildrensafeandfreefrommetalcontaminants.
OCCUPATIONALHEALTHANDSAFETYANDSECURITY
AllWoolworthsbuildingsaredesignedwithinstringenthealthandsafetyguidelinesandwithemployeeandcustomerwellbeingasaprimaryconsideration.Jointworker/managementhealthandsafetycommitteesareinplace.PreventionisanimportantaspectofWoolworthshealthandsafetyproceduresandthecompanysupportsongoingcommunicationintheworkplace,particularlyaroundsafeworkingpracticesinhighriskareassuchasstoresandthedistributioncentres.
Woolworthscurrentlyemploys14occupationalhealthpractitionerstodeliveracomprehensiveoccupationalhealthandwellnessprogrammewhichincludesanemployeeassistanceprogramme(EAP).Thisprogrammeprovidesconfidentialcounselingforpersonalorbusinesscrisesaswellaslifestylecounselingtoemployeestohelpthemmanagehealthrelatedissues.
Ongoingvigilanceandadeterminationtoputthesafetyofourstaffandcustomersattheforefrontofourstoressecuritymanagementprocesshavebeencriticaltocontainingcrimeduringtheyeararmedrobberieshave,however,stayedthesameasthepreviousyearat18.Fortunatelynodeathsorseriousinjurieswererecorded.
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Injuriesonduty Numberofinjuries
July2009toJune2010 693
July2008toJune2009 551
July2007toJune2008 511
July2006toJune2007 751
July2005toJune2006 637
July2004toJune2005 687
HIV/AIDS
HIV/AIDSisregardedasapotentialthreatwhichcanbemanagedandmonitoredwiththeappropriateleadership,strategicplanning,implementationofcosteffectiveandsustainablemeasures,tomanagetheimpactsontheorganisationanditsemployees.
ActivitiesandAccomplishments:
ReviewoftheWoolworthsHIV/Aidsstrategyinlinewiththeorganisation'sstrategy. WoolworthshasacomprehensiveEmployeeAssistanceProgramme(EAP)whichencouragesemployees/
peoplewhoareaffectedorinfectedbyHIVtocomeforwardforconfidentialcounselingandsupport. AllWoolworthsemployeeshaveaccesstofreetreatmentandcare.TheClinicalManagementProgram,(100%
Companyfunded)offerstreatmentandotherbenefitstotheHIVpositiveemployeeswhodonotqualifyformembershipoftheWooltruHealthcareFund.ThosebelongingtotheHealthcareFundcanaccesstreatmentviathefund.
WoolworthsiscurrentlylaunchingatestingcampaigninlinewiththeGovernment'sNationalHCT(HIVcounselingandTesting)campaign.ThisincludesaWellnesscomponent.ThesetestsincludeHIV,Diabetic,Cholesterol,BodyMassIndexandBloodPressureScreening).
HIV/AidsawarenesswithinstoresandHeadOfficecontinues,andsomeindividualstoreshavetheirownHIVawarenesscommitteesthatarrangeHIV/Aidsrelatedawarenessactivities.ThiswillbereinforcedbytheoneononeeducationthattakesplacewiththeHIVscreeningtest.
WoolworthsalsocontributestobettermanagementofissuessuchasHIV/AidsintheworkplaceinpartnershipwithorganisationssuchastheSouthAfricanBusinessCoalitiononHIV/Aids.
WoolworthsalsosupportsnationalcampaignssuchasWorldAidsDayandthe16DaysofActivismCampaignfornoViolenceAgainstWomenandChildren,breastcancerandsubstanceabuseawareness.
Thechallengesahead
EncouragingallemployeestoknowtheirHIVstatusbytakingpartintheHCTCampaign; EncouragingemployeestoconfidentiallyreportcasestotheClinicalManagementProgramme,Wooltru
HealthcareFundHIVProgrammeorWoolworthsHealthServicestoensureaccesstosupportandinformation; Planningforsustainable,costeffectiveinterventionsintotheorganisationtakingthefollowingkeyfactorsinto
account: PuteffectivemeasuresinplacetoreducethefinancialimpactoftheHIV/Aidsepidemiconthe
organisation Introducecosteffective,sustainableinterventionsthatsupporttheorganisationalstrategy.
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ENVIRONMENT
COMMITMENTSANDPROGRESS
Ourkeyinitiativesundertheenvironmentalpillarofourprogrammeincludeorganicandfreerangeproducts,healthyeatingchoices,protectionofbiodiversity,animalwelfare,watermanagement,wastemanagementandthereductionofpackaging.Wecontinuetopromoteenvironmentallysoundfarmingmethods,therebyensuringthatourconventionalproducefarmersmigratetoenvironmentallysensitivefarmingmethodsandorganicproduction.
Commitment 2010 2009 By2012
Relativewaterreductionstores 27.3% 12% 30%relativereduction
Waterreductionheadofficecomplex
24% 20%(restated) 30%reduction
Organicfoodsales
(excludingfarmingforthefuture)
R631m R500m R1billion
Organicandsustainablefibreclothingsales
R608m R400m R1billion
Farmingforthefuturecompliancelevels
68.4% Benchmarkyear 85%
WoolworthswinesuppliersmembershipofBiodiversityandWineInitiative(BWI)
70% 55% 100%
Foodspackagingreduction 660tons 320tons 2000(20%reduction)
Recyclabilityoffoodspackaging 66% 50% 90%
Recycledcontentinfoodspackaging
24% 23% 25%
Recyclingsymbolsonfoodspackaging
83% 79% 90%
Reusablebagssales(no.ofbags) 920000 900000 1000000
Reductioninplasticbagsalespertransaction(benchmark1.33)
.995 1.17 1
Woolworthsrecyclingfacilities 8 0(ExceptforCFLrecyclinginstore)
50
%wastetolandfillfromdistributionoperations
16% 33% 0
SUSTAINABLEAGRICULTUREANDMANAGEMENTOFBIODIVERSITY
SouthAfricahasthethirdhighestlevelofbiodiversityintheworld,butagricultureanditsimpacts,areofthemostsignificantthreatstonaturalresourcesandbiodiversityinSouthAfrica.
Overthepastdecadeithasbecomeclearthatwhilethecurrentapproachtofarmingproducescheapfoodinabundanceitalsocarrieshiddencostsforthehealthoftheplanetanditspeople.Yearsofecosystemdegradation
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inSouthAfricasagriculturallandscapeshasresultedindepletedsoils,barrenlandsandpoisonedwaterways,risinginputcostsandgreenhousegasemissions,andincreasingruralpoverty.
Thissituationisdrivingamovetowardstheconceptofsustainabilityinfarmingpractices,agriculturewhichcanprotectsoilsandwatersupply,nourishpeople,supportrurallivelihoodsandhelpcommunitiescopewithachangingclimate.Thisconceptcentresontheneedtobuildfarmproductivityandprofitabilityinawaythatprotectsthenaturalresourcesonthefarmandsocialwellbeingensuringthattheagriculturalsectorcanmeetworldfooddemands,enhancerurallivelihoodsandunderpinstableeconomicsystems.
Woolworthsanditssuppliersarededicatedtosellingproductsthatdonotcauseharmtothenaturalworldinthewaytheyaremade,andwearefocusedonworkingwithoursupplierstoimprovefarmingpractices.
WWFasaStrategicPartnerinAgriculture
WWFisaleaderinunderstandingandmitigatingtheimpactsofkeydriversofbiodiversitylossincludingagriculture.InSouthAfrica,theyhaveinvestedinsustainablefarmmanagementtechniquesandtoolsforlargeandsmallgrowersinarangeofcommoditiesandcurrentlymanageseveralproductspecificsustainabilityinitiatives,includingtheBiodiversity&WineInitiative,theSustainableSugarFarmManagementSystemandtheestablishmentofGreenChoice,inpartnershipwithConservationInternational,aimedatpromotingwiseresourceusethroughoutthefoodsupplychain.
Weareestablishingacollaborativeprojectwhichassistsinenhancingtheenvironmentalbenefits,andacceleratingtheadoptionlevels,oftheFFFBetterManagementPracticesacrosstheWoolworthssupplybase.ThehighimpactdairysectorhasbeenidentifiedasagoodstartingpointforputtingthiscollaborationbetweenWWFandWoolworthsintopractice.
WWFwillplayanimportantroleinverifyingtheprogressandresultsachievedundertheFFFprogramme,aswellasprovidingspecialistknowledgeandexperienceacrossarangeofbiodiversityandwaterareas.WoolworthswillpartiallyfundWWFssustainableagriculturework,aspartofthecollaborationbetweentheentities.
Woolworthsbroaderresponseincludes:
takinggeneticallymodified(GM)ingredientsoutofourfoodwhereverpossible.AnyGMingredientsremainingareclearlylabeledwhichmeanscustomerscanmakeinformedchoiceswhileshopping;and
sellingonlybadgerfriendlyhoney. onlysourcingwoodwhichisrecycledorindependentlycertifiedascomingfromapprovedsustainablesources,
e.g.ForestStewardshipCouncil(FSC); sellingnoproductorbyproductofthreatenedspecies; workingonasustainablesolutionforpotatofarmersintheSandveld; requiringWoolworthswinefarmersintheCapeFloralKingdomtobemembersoftheIntegratedProductionof
Wine(IPW)programmeandtheBiodiversityandWineInitiative(BWI),overtime; shiftingconventionalfarmerstoadoptenvironmentallysensitivefarmingpracticesreducingtheirimpacton
theenvironment,throughthefarmingforthefutureprogramme(seebelow);and supportingpredatorfriendlyfarming.Weareagainstindiscriminateformsofpredatormanagementthatcause
pain,distressordeathtopredators.Weareworkingcloselywithoursupplybase,universities,theDepartmentofAgriculturesresearchfarmsandanumberofotherexpertsinthisfield,includingtheLandmarkFoundation,toimplementguidelineswhichsetoutethicalpredatorcontrolmeasures.ThefoodsteamisalsoactivelyinvolvedinanAnatoliansheepdogadoptionprogrammesponsoredbytheWoolworthsTrust.
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Fishingforthefuture
WoolworthsFishingfortheFutureinitiativeisaguaranteetocustomersthatourseafoodis:responsiblysourced,legallycaughtandhasfulltraceability.
WearepartneringwiththeSouthAfricanSustainableSeafoodInitiative(SASSI)andusetheirred/amber/greencolourcodingsystemtoindicatethreatenedspecies.
Woolworthshasalsorecentlyintroducedanewgourmetfishselectionsustainablywildcaught,MSC(MarineStewardshipCouncil)certifiedAlaskansalmonfillets,mackerelsmoked&pepperedfilletsandherringfillets,andsustainablyfarmedtroutsmokedfillets.TheMSCcertificationcomplementsthelocalSASSIprogramme,andextendsourcoverageforimportedandfarmedfishspecies.
PalmOil
WoolworthsisthefirstSouthAfricancompanytobecomeamemberoftheRoundtableonSustainablePalmOil(RSPO).TheRSPO,aglobalorganisation,hasdevelopedasetofstandardscalledthePrinciples&Criteria(P&C)thatdefinethepracticesforsustainablepalmoilproduction.Thesestandardsaddressthelegal,economic,environmentalandsocialrequirementsofproducingsustainablepalmoil.
Currently,themajorityofpalmoilisproducedinMalaysiaandIndonesia,andaccordingtotheRSPO,thesecountriesaccountfor83percentofproduction.OilpalmisgrownmostoftenonnewlyclearedrainforestorpeatswampforestsratherthanonalreadydegradedorabandonedagriculturallandsomethingtheRSPOiscloselymonitoringandworkingtoend.Inbothcountries,thenumberofcriticallyendangeredandthreatenedlandmammalshasincreasedsignificantly.
TheRSPOunitesstakeholdersfromsevensectorsofthepalmoilindustrypalmoilproducers,palmoilprocessorsortraders,consumergoodsmanufacturers,retailers,banksandinvestors,environmentalornatureconservationNGOsandsocialordevelopmentalNGOstodevelopandimplementglobalstandardsforsustainablepalmoil.
Woolworths,whichusessome600tonsofpalmoileachyearinitsproducts,hasjoinedtheRSPOinordertopromoteandraiseawarenessoftheneedforsustainablepalmoilproduction.ThiscommitmentincludespurchasingcertifiedsustainablepalmoilcertificatesforthetonsofpalmoilusedinWoolworthsfoodsandbeautyproducts.BybuyingtheseGreenPalmcertificatesWoolworthsiscontributingtoRSPOeffortstoincentiviseIndonesianandMalaysianpalmoilproducerstobecomecertifiedsustainableproducers.Woolworthshasalsoundertakentoreplacepalmoilwithalternativeswherepossibleandhasfurthercommittedtousingonlycertifiedsustainablepalmoilby2015.
FARMINGFORTHEFUTURE
Togetherwithourfarmers,werepioneeringanewapproachtogrowingfoodsustainablyandinharmonywithnaturesothatSouthAfricasfarmswillbeabletoprovideenoughfoodforfuturegenerationswithoutcompromisingqualityoraddingtothecost.WecallitFarmingfortheFuture.
FarmingfortheFutureisaholisticapproachthatmanagestheentirefarmingprocesssystematically.Itallstartswithbuildingandmaintainingthesoil,because,asanyfarmerwilltellyou,ittakesgoodsoiltoproducegoodfood.
Healthysoilisbetterabletoretainwater,soitneedslessirrigationandwateruseisreduced.Italsoneedsfewerchemicalinterventions,whichmeansfarmersonlyusesyntheticfertilisersorherbicideswhenneeded.
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Fewerchemicalsmeanlesschemicalrunoff,which,alongwithlesssoilerosionandlossoftopsoil,helpsmaintainwaterqualityandbiodiversity.Farmersalsouseintegratedpestmanagementprinciplesinordertoreducerelianceonchemicalpesticidesandherbicidesandencouragebiodiversity.Allthefarmerswhogrowproduceforusarejoiningusonthisjourney,andby2012allourlocallygrownfreshproduce(otherthanorganicallycertifiedproduce)willbegrownthisway.Somekeyprogressduringtheyear.
96farmswereauditedlastyearaspartoftheprogrammeoverthelastyear; theWWcompliancetargetforthisyearbasedonturnoverwas57%,while68.4%wasachieved; 23horticulturesuppliersarebeingintroducedtotheprogramme;and RecentFFFcustomerresearchshowedthatahighpercentageofcustomersunderstandtheprogrammefully
(54%).
FarmingfortheFutureinactionFlipNel,whosefarmhasbeensupplyingWoolieswithtomatoes,peppersandotherfreshvegetablesforyears,hasbeenoutsincedawn,runningjustafewofthehundredsofcheckshedoesroutinelytomakesurehiscropsaregettingjusttherightamountofwaterandfertilisertheyneed.FlipwasoneofthefirstWooliesfarmerstoadoptFarmingfortheFuture.Hesseenforhimselfhowfarmingthiswayimprovessoilandwaterqualityandcutswateruse.Hesalsoseenhowthenewmethodshavebroughtmorebirdsandinsectsbacktothefarm,andhowtheyrehelpingtokeepinsectsthatcoulddamagehiscropundercontrol.Healsoloveshearingthebirdssingingasheheadstothefieldsinthemorning.WATER
OverthecourseofthecurrentyearincreasingattentionhasbeenfocusedonwaterscarcityandqualityaskeyissuesforSouthAfricasdevelopment.SouthAfricaisawaterscarcecountry.Inaddition,thequalityofourwaterisincreasinglythreatened,inpartbyindustrialandagriculturalactivity.
ThemajorityofSouthAfricaswaterresourceisusedinfarmingirrigation,andWoolworths,asamajorsupplieroffreshproduce,hastoplayaroleinwaterconservation.AccordingtoWWFSAthestressplacedonSouthAfricasscarcewaterresourceshasresultedinmorethan84%ofmainstreamfreshwaterecosystemsbeingclassifiedasthreatenedinarecentnationalsurvey.
Wearedeeplycommittedtobeingpartofthesolutionandhavealonghistoryofworkingwithoursupplierstoinfluencechange.Wewillcontinuetoensurethatourbusinessandsupplychainactivityconservesourpreciouswaterresources.
Woolworthshascommittedtoreducingwaterusageandmanagingwastewaterandwatereffluent.Allsupplierswhomakefabricforourclothesadheretoverystrictstandards.Nomaterials,dyesorchemicalsusedintheproductionofWoolworthsclothingortextilesposeanunacceptablerisktohealthortotheenvironmentduringtheirmanufactureordisposal.Wecontinuetoentrenchourstrictcodeofconductregardingdyes(includingtheremovalofAzodyes),chemicalsandwatermanagementinoursupplychain.
Woolworthsprogrammeincludesthefollowingmeasures:
Woolworthsmeasurestheamountofwaterusedbysuppliersandworkswiththemtoreducewateruseandimprovewaterwastemanagementduringgrowing,productionandmanufacture;
withintheFoodsunitthisworkincludesthereductionofpesticides,fertilisersandwaterusage; WoolworthsfreshproducefarmershaveadheredtoEurepgapfarmingpracticesfornearlyadecade.Eurepgap
(nowknownasGlobalgap)isaninternationallyrecognisedstandardforsafeandsustainableagriculture,settingguidelinesforenvironmentalandlabourstandardsaswellasproductsafety;
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Woolworthsisthecountrysleadingretailerincertifiedorganicfreshproduce,whichisgrownwithouttheuseofartificialchemicals,suchasherbicidesandpesticides,anddoesnotreleasepotentiallyharmfulchemicalsintowatersupplies;
Woolworthsisalsoworkingwithourconventionalfarmerstohelpthemincorporatemoreresponsiblefarmingpracticesintothewaytheyfarminordertoestablishathrivingandsustainablemicrobialpopulationinthesoilthroughthefarmingforthefutureprogramme;
wecompletedawatertrialwith66foodsupplierswhichhashighlightedissueswithrunoffwater(intoriversandaquifers)fromirrigationpractices,andwastewaterfromfarmprocessingandareworkingwiththeGlobalCompactandtheGermanDevelopmentAgency(GTZ)tofurtheranalysewaterusageinagricultureanddevelopmethodsforreduction;
WoolworthsisworkingwiththeCouncilforScientificandIndustrialResearch(CSIR)toidentifySouthAfricanarableareasthatarelikelytostrugglewithwaterscarcityduetotheimpactsofclimatechangeandtoincorporatethisthinkinginitssupplychainstrategy;
wearecommittedtowaterconservationeducation,especiallyassistingtoeducateoursupplychainandprovidevaluablewatersavingstipstobothcustomersandemployees;and
weareworkingonresearchingandunderstandingthewaterfootprintofselectedpriorityproducts.
Waterneutrality
WoolworthsistheonlyretailertoformpartoftheWorldWideFundforNatures(WWF)WaterNeutralScheme.Thescheme,launchedinassociationwiththegovernmentsWorkingforWaterprogramme,encouragescorporatestobecomewaterneutral.Theprogrammehasmultipleobjectivesofreducingtheimpactofinvasivealienplantsonourwatersupplies,improvingtheproductivepotentialofland,restoringbiodiversityandecosystemsfunctionaswellascreatingjobsandeconomicempowerment.
Woolworthsiswaterneutralbyeliminatinginvasivewaterthirstyalienplantsonsupplierfarmsandinprotectedareas,suchastheTankwaKarooNationalPark.TheprojectwillreleaseenoughwaterintoSouthAfricaswatersystemtooffsetthewaterusedbyWoolworthsoperationseachyear,ultimatelymakingthecompanywaterneutral.Woolworthswillalsofundthetrainingandemploymentofworkerswhowillremovealienplants,therebycreatingemploymentaswellasmanagingitsenvironmentalimpactsresponsibly.Theprojectisa20yearcommitment.
AccordingtoWWFapproximately7%ofSouthAfricasaverageannualrunoffisusedbyalienandinvasiveplants.Byassistingtoeliminatetheseplants,Woolworthsmakesameaningfulcontributiontowardsconservingwaterresourceswellintothefuture.
Realestate
Whenevaluatingnewrealestateopportunities,Woolworthsconsidersifthedesignofthepropertyenablestheefficientuseofwaterandwaterwaste.Thisincludes:
storageanduseofrecycledandgreywatersystems,retainingasmuchwateronsiteaspossibleforreuse; useofindigenousshrubsandgroundcovers,minimisingirrigationneeds; stormwatermanagementallowingrainwatertobestoredandused;and pulsemetresinplacetoimprovewatermeasurementandmonitoring.SuchmeasureshavealreadybeenimplementedatthedistributioncentreinMidrand.
Headofficefacilitieshaveshowna24%decreaseinwaterusagefromour2008benchmarkandwehavealsoachieveda27%reductioninrelativeusageinstores(2008benchmark:122kl/m2).Thisissignificant,notonlyforconservation,butalsoasclearproofthatsustainabilitycandelivercostsavings.
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Farmingforthefutureandwater
Farmingforthefuturemeasuresthewaterrequiredfortheplantandirrigationisusedonlyifandwhenrequired.Earlyindicationsshowasignificantwatersaving.Theconservativeuseofchemicalsalsopreventsfertilisersandpesticidesfrompossiblefreshwatercontamination.
Werepleasedtosayby2012allourlocallygrownfreshproduce(otherthanorganicallycertifiedproduce)willbegrownthisway.
ThefarmingforthefutureauditresultshaveagainhighlightedtheneedforustofocusonwaterconsumptionandwastewatermanagementintheFoodssupplychain.TheprojectwiththeGermanDevelopmentAgency(GTZ)focusingonwastewatermanagementin66foodspackhousesisgoingtobeextendedtowineanddairysuppliers.
Woolworthssuppliersefforts
LaMotteproducesredwines(GrandRougeMerlotandGrandRougeCabernetSauvignon/ShirazReserve)forWoolworthsaswellaspotteddisaplants.LaMottehasacertifiedenvironmentalmanagementsystemandreducedtheirrelativewaterusageperlitreofwineby41%inthelastfinancialyearfroma2004benchmark.
KimberlyClarkSouthAfricaachieveda10%reductionintotalwaterusageinthelastfinancialyear.BothsuppliersarepreviouswinnersofWoolworthsecoefficiencyawardthatrecognisessuppliersforexcellenceinsustainablebusinesspractice.
ANIMALWELFARE,ORGANICANDFREERANGE
Woolworthshasalwayshadclearguidelinesonanimalwelfare.Theseinclude:
anNSPCAapprovedAnimalWelfareCodeofPractice;and insistencethatallanimalsdestinedforstoresmustberearedhumanelyandtreatedfairlyinaccordancewith
ourcodeabattoirsareregularlyauditedbyaWoolworthstechnologist.Woolworthswasalsoheavilyinvolvedinthedevelopmentandlaunchofbadgerfriendlyhoney,predatorfriendlyfarmingandsustainablefishingpractices.
Wedonotpermit:
animaltestingwehaveneveraskedorcommissionedourprivatelabelhealthandbeautysupplierstoconducttestingonanimals.Ouranimalwelfarepolicyrequiresthatsuppliersdidnotuseanyrawmaterialstestedonanimalsafter1January2001;
productsmadefromrealfur; sellingofwholeeggsfromcagedbirds; ourhealthandbeautysuppliersofourprivatelabeltouseingredientsthatarebyproductsofthefood
industry;and theuseofduckfeatheranddownthatisnotabyproductofthefoodindustryinhomeware.
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WoolworthsentireprivatelabelrangeoftoiletriesandcosmeticshasbeenapprovedbyBeautyWithoutCruelty(BWC).
WoolworthsextensiveEarthFriendlyrangeofhouseholdcleaningandpersonalcareproductsaremadewithnaturallyderived,plantbased,biodegradableingredientsandcontainnopetrochemicalsandnoartificialcolours.EveryproductcarriestheendorsementofBeautyWithoutCrueltyandWoolworthshasusedrecyclablebottleswhichthemselvesaremadefromatleast30%recycledmaterials.
Woolworthsiscommittedtoaddressingtheissueofmulesingofwoolproducingmerinosheep.Mulesingisthesurgicalremovalofstripsofwoolbearingwrinkleskinfromaroundthebreechofasheep.MulesingisacommonpracticeinAustraliaasawaytoreducetheincidenceofflystrikeonMerinosheep.AlthoughmulesingisnotpractisedinSouthAfrica,WoolworthswillcontinuetomonitorlocalSouthAfricansupplierstoensurethattheyconformtothepositionstatementmandatedbyCapeWoolsSA.
Freerangeeggs
Woolworthsisproudtohavebeenthefirstmajorlocalretailertostopsellingwholeeggsfromhenskeptincagesin2004onlywholefreerangeeggsaresoldinWoolworthsstores.Weremaintheonlymajorlocalretailertohaveachievedthis.
FreerangeeggproductioninSouthAfricaisregulatedbytheAgriculturalProductStandardsAct.WoolworthsfreerangeeggsupplierfarmersarefullycompliantwiththeregulatoryrequirementsandtherequirementsforfreerangeproductionasstipulatedbytheSouthAfricanPoultryAssociation.Ourfreerangefarmersareauditedregularlytoensureadherencetoourstrictstandards.
Ourfreerangehensenjoyaccesstoamplefoodandwater,sunshineandshade,theoutdoorsandprotectiveshelters.Theyarefedagrainbaseddietthatcontainsnoanimalbyproducts.
Thefirsthundredfoodlinesmadewithfreerangeeggswillappearonourcountersinthelastquarterof2010withseventymoreappearingin2011.Wewillbechanging"factorybyfactory"asthisiscontrollableandwecanguaranteeintegrity.
Organicproducts
WoolworthsoffersSouthAfricanconsumersthewidestrangeofcertifiedorganicproducts,frompastaandpeanutbuttertoTshirtsandtowels.InFebruary2008welaunchedover100neworganicgrocerylineswhichcaterforbothbasicgroceryneedsandthemorespecialisedtastesofthecontemporarycook.Therangeincludesjams,pastasandpastasauces,rice,condiments,oils,beans,breakfastcereals,biscuits,teas,coffees,juices,nuts,chocolatesandmore.Thishasmadeiteasierthaneverforshopperstoleadamorecomprehensiveorganiclifestyle.
Woolworthsbeganitsorganiccottonjourneyin2004andhassteadilyincreaseditsuseoforganicallygrowncottonoverthepastsixyears.Woolworthsoffersacomprehensivecollectionoforganiccottonproductsinchildrens,mensandwomensouterwearandsleepwear,babyclothing,towelsandbedding.
in2010ourorganicandfreerangefoodsaleswereoverR500m; organicclothingsaleswereconsiderablyhigherthan2009sales,andoverR400moforganiccottonsaleswere
achieved,stillbelowthetargetwehavesetforourselvesfortheyear; wenowsellonlyfreerangelamb,atthesamepricepointasconventionallambwassoldat;and wehavesetinternalsalestargetsforitemsmadefromothersustainablefibres,includingsoya,bambooand
organicwool.
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Sustainablefibres
Drivinginnovationinclothingcontinuedtobeastrongfocus.Theuseoforganiccottoninclothingincreasedandgarments