Wesfarmers Sustainability Report 2012 - Sydney
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Contents About Wesfarmers Managing Director’s welcome 2 The durability of our company is reflected in our history. With origins in 1914 as a Western Australian Message from the Chairman 3 farmers’ cooperative, Wesfarmers has grown into one of Australia’s largest listed companies. Our Sustainability at Wesfarmers 4 diverse business operations now include supermarkets; department stores; home improvement and Scorecard6 office supplies; coal mining; insurance; chemicals, energy and fertilisers; and industrial and safety Engaging our stakeholders 10 products. We are one of Australia’s largest employers and have a shareholder base of approximately Reconciliation Action Plan 17 500,000 direct shareholders. Looking after our environment 18 Sustainability is an important part of our history and is a critical element in our future success. Driving our performance 26 Coles28 Home Improvement and Office Supplies 34 Securities exchange listing Target42 Wesfarmers Limited is a company limited by shares that is incorporated and domiciled in Australia. Kmart46 Australian Securities Exchange (ASX) listing codes: Insurance50 – Wesfarmers (WES) Resources54 – Wesfarmers Partially Protected Shares (WESN) Chemicals, Energy and Fertilisers 58 Industrial and Safety 62 Other businesses 66 About this report 67 Data Bank 68 Independent Assurance Statement 70 Glossary72 Group structure and feedback form 73 15 Like to know more about our story? Please visit www.wesfarmers .com.au years of reporting our sustainability performance or alternatively, use a smartphone with a QR reader app to scan this symbol www.wesfarmers .com.au Wesfarmers Limited ABN 28 008 984 049
The Wesfarmers story Wesfarmers has long recognised the value of sustainable business practices. Sustainability is integral to how we do business, and we continue to strive for innovative and efficient approaches to improve our social, environmental and economic performance. Dancer Brooke Widdison-Jacobs, West Australian Ballet photographed by Jon Green Wesfarmers Sustainability Report 2012 1
Managing Director’s welcome Our commitment to sustainability continues to underpin all our efforts and while I’m proud of the progress we have made in our environmental, social and economic performance, the expectations we and others have for continuous improvement mean we still have plenty of work to do. For us, the challenge of reducing our greenhouse gas emissions has always been driven by much more than the prospect of legislative change. We have been motivated by doing what is right for the environment, for our customers and for our businesses. We have steadily improved our preparedness for a world in which carbon is priced by continuing to invest in energy efficient technologies and systems. Greenhouse gas emissions from processes at our Chemicals, Energy and Fertilisers business have been reduced thanks to the introduction of new technology, without restricting productive output. Coles supermarkets continue to roll out in-store initiatives which improve their energy efficiency and enhance the shopper experience. These are just two examples from within our businesses of significant initiatives that lower our emissions. With the new carbon price laws now in place, our focus is on compliance, further improving our energy efficiency, and greater reductions in direct emissions where we can do that sensibly. Quality people Our commitment We recognise that as a major All the initiatives and programs Wesfarmers has long recognised employer and participant in outlined in this report are driven the value of a holistic approach business in many communities by our innovative, resourceful to managing our businesses. We across Australia and New Zealand and creative team members. started reporting on sustainability- we have serious obligations to The sustainability and underlying related matters back in 1998 when operate in a sustainable way. success of our operations is, in we stated that we were ‘committed every sense, in the hands of our to continuous improvement in Carbon price people. Their skills constitute our our environmental, health and One of the most contentious issues only true competitive advantage safety performance’. in Australia over the past year has and are our most important been the introduction of carbon sustainable resource. This commitment continues to pricing and formal carbon emission underpin all our efforts and while With an employee base of some caps through implementation of the I’m proud of the progress we have 200,000 people, one of the biggest federal government’s Clean Energy made in our environmental, social challenges facing our organisation, Future legislative package. and economic performance, the like many others in Australia and expectations we and others have We have stayed out of the political New Zealand, is attracting and for continuous improvement mean debate, but Wesfarmers has retaining quality team members. we still have plenty of work to do. consistently supported putting a price on carbon as a policy objective. 2 Wesfarmers Sustainability Report 2012
Each of our business units operates Collectively, these programs make its human resource function a significant difference to local autonomously and has its own communities all over the country. Message from programs to invest in team members’ skills and capabilities, complemented Wesfarmers understands that our businesses only exist with strong the Chairman by a number of Group programs As Chairman, I believe our objective must customer and community support for executives. be to ensure Wesfarmers is successful in and our programs are designed to However, the broad Wesfarmers ensure we remain an integral part a sustainable way, not only for the benefit objective is to ensure we provide of the communities in which we of our half-a-million shareholders, but fulfilling and safe workplaces, live and work. for our 200,000 employees, millions of we reward good performance customers and thousands of suppliers in While the customer is at the core of and provide opportunities for the communities in which we operate right all our business endeavours it is the advancement. This remains our across Australia and New Zealand. case that the suppliers of our goods most significant contribution to A key aspect of that sustainable business and services are also a vital part of the communities we serve. model is safety and, regardless of current making Wesfarmers the company This year we have made some that it is today. Our over-riding performance, we should seek every important improvements in our safety objective is to ensure our suppliers opportunity to improve safety in all performance, but we are still a long are treated fairly and with integrity our businesses. way from our goal of zero harm and so that their relationship with our To that end, we have implemented a we will redouble our efforts to achieve businesses is mutually beneficial. Group‑wide review, led by John Gillam, safer workplaces in the years ahead. Managing Director of Bunnings, focused Through our Reconciliation Action My thanks on safety performance, real workplace I would like to thank all the safety behaviour and improving outcomes. Plan (RAP), launched in 2009, we employees of the Wesfarmers Group committed to a number of initiatives I am confident this will provide us with who have contributed to the positive aimed specifically at increasing a platform for even better results in this progress we have made with our employment opportunities for critical measure of success into the future. sustainable business strategies over Aboriginal people within our the past 12 months. businesses. Pleasingly, we are improving in this area, and many of I am very proud of our actions our businesses have implemented and achievements. Last year, our specific Aboriginal employment reporting efforts were recognised programs ranging from cadetships when we won the Sustainable to pre-employment training courses. Company of the Year at the 2011 There is, of course, more work to Australian Sustainability Awards. Bob Every AO, Chairman be done, but as our businesses This achievement aside, I trust that continually look for ways to the readers of this report are able improve we expect better and to find the information necessary better outcomes. for them to form their own view of our progress. Partnerships Another important area we continue to focus on is our community partnerships. All our businesses have extensive community contribution and support programs, many of which are outlined in this report. Richard Goyder We are major sponsors of the Managing Director arts, health and medical research, Indigenous initiatives like the Clontarf Football Academy, education programs from school to university, and a range of national charitable organisations. Wesfarmers Sustainability Report 2012 3
Sustainability at Wesfarmers It’s our responsibility. From our origins in 1914 as a Western Australian farmers’ cooperative, Wesfarmers has grown into one of Australia’s largest publicly-listed companies. This, combined with our diverse portfolio of businesses, confers a significant responsibility on us to get our sustainability efforts right. This is a responsibility not only towards our employees and shareholders, but also our customers, our suppliers, our communities and our environment. Driving our Engaging our performance stakeholders • shareholder returns • shareholders • innovation • employees • safety • customers • ethical behaviour • suppliers • accountability Our • communities • developing our responsibility • government people Looking after our environment • reducing greenhouse emissions • energy efficiency • conserving water • reducing waste • rehabilitation Our approach to sustainability In this report, each of our businesses has set out the most significant material issues Wesfarmers’ objective is to provide a satisfactory influencing their operations. At a Group return to our shareholders. We believe to do this level, our material issues are: effectively our businesses need to focus on three •P rotect and enhance our reputation with stakeholders areas to ensure we remain a sustainable business: •L ook after the safety and development engaging our stakeholders; looking after our of our people environment; and driving our performance. •C ontribute positively to the communities in which we operate • Minimise our environmental footprint •R esponsibly source products across the Group • shareholder returns Driving our Engaging our • shareholders • innovation • employees • safety performance stakeholders • customers 4 Wesfarmers Sustainability Report 2012 • ethical behaviour • suppliers • accountability Our • communities
For the first time we are reporting on our environmental performance in both absolute and relative terms. This allows us a better measure of progress towards sustainable business operations. The front section of this report is We set very few public targets, structured around these key focus preferring to be judged on our areas, and is designed to give you an performance, although each business overview of the Group’s challenges, has relevant internal targets that reflect initiatives and outcomes over the past its business operations and plans. year. However, not all of the challenges We have also included some broad facing our businesses are common across metrics to describe both the Group the Group, and our business units also and business unit progress over time report on specific issues unique to their in the areas of greenhouse emissions, situation and operations. energy and water use, occupational Reporting openly and transparently safety information, as well as on a large number of key outcomes community contributions. allows us to track our progress, and Our performance in these areas is publicly acknowledge our performance. set out below and the performance However, we are focused on operating of each of our businesses can be our businesses for the long term found in the ‘Scorecard’ section on without the distraction of relatively the following pages. short-term forecasts. Wesfarmers Group data Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 7,000 200 35 1,000,000 15,000 0.25 6,000 30 160 6,349,576 6,298,544 800,000 12,000 0.20 31.07 6,139,222 6,132,809 13,151 5,820,625 5,000 25 12,243 12,107 4,000 120 20 600,000 9,000 0.15 9,966 9,704 32.40 33.75 29.76 3,000 80 15 30.00 400,000 6,000 0.10 2,000 10 40 200,000 3,000 0.05 1,000 5 0 08 09 10 11 12 0 0 08 09 10 11 12 0 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO 2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 15 80 Direct 09 25.77 77.57 10 19.60 72.24 12 60 13.06 12.89 11 33.80 57.62 12 31.82 10.95 10.90 9 9.94 40 45.78 6 Indirect 09 31.85 20 10 26.18 3 11 43.77 08 09 10 11 12 0 09 10 11 12 12 40.42 0 Wesfarmers Sustainability Report 2012 5
Sustainability at Wesfarmers Scorecard This section provides comparative information on our performance in key sustainability areas. Retail operations Coles Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 3,000 120 8 300,000 4,000 0.12 2,978,518 2,938,829 2,500 3,858 7.39 7.29 7.27 7.08 7.02 6 3,000 2,530,856 2,523,808 2,401,609 2,000 80 0.08 2,983 2,709 1,500 4 150,000 2,000 2,170 40 0.04 1,725 1,000 2 1,000 500 0 08 09 10 11 12 0 0 08 09 10 11 12 0 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 20 25 Direct 09 12.36 20 10 7.32 22.31 21.92 17.45 15 16.98 11 15.61 19.72 15.55 15 12 19.04 12.87 12.99 10 Indirect 10 09 7.36 9.17 5 5 10 1.85 11 6.70 0 08 09 10 11 12 0 09 10 11 12 12 2.88 Bunnings Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 250 35 1.0 150,000 1,000 0.020 242,900 30 0.8 140,000 200 800 226,184 0.87 869 0.015 844 210,620 0.82 25 0.77 186,525 0.73 732 0.6 130,000 717 179,046 150 600 0.69 691 20 0.010 100 15 0.4 120,000 400 10 0.005 50 0.2 110,000 200 5 0 08 09 10 11 12 0 0 08 09 10 11 12 100,000 0 08 09 10 11 12 0.000 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 15 40 Direct 09 3.61 14.56 10 2.03 13.79 13.41 13.28 30 11 3.28 12.53 10 12 2.82 27.79 26.37 20 Indirect 20.09 5 09 11.92 15.53 10 10 18.06 11 23.09 0 08 09 10 11 12 0 09 10 11 12 12 24.97 6 Wesfarmers Sustainability Report 2012
Office Supplies Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 80 50 0.25 200,000 60 0.05 40 0.20 50 0.04 0.22 52 52 60 66,867 0.21 50 0.21 65,000 63,362 40 0.03 55,522 30 0.15 0.17 40 150,000 30 0.06 20 0.10 0.02 20 n/r n/r n/r 20 10 0.05 0.01 10 0 08 09 10 11 12 0 0 08 09 10 11 12 100,000 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 15 1.5 Direct 09 0.49 12 1.2 10 0.51 1.35 11 0.97 12.30 12.17 11.95 0.9 12 1.01 10.81 1.06 9 10.40 0.49 0.51 0.6 Indirect 6 09 n/r 3 0.3 10 0.00 11 0.38 0 08 09 10 11 12 0 09 10 11 12 12 0.05 Target Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 250 120 1.0 220,000 350 0.2 300 244,995 339 239,827 0.8 230,545 231,090 200 311 306 219,858 0.84 0.82 0.82 80 250 0.77 0.76 150 0.6 200 110,000 0.1 100 0.4 150 40 100 n/r n/r 50 0.2 50 0 08 09 10 11 12 0 0 08 09 10 11 12 0 0 08 09 10 11 12 0.0 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 10 3.5 Direct 09 0.99 3.43 3.0 10 1.44 9.34 9.20 3.12 8 3.08 2.5 11 1.10 8.14* 8.01 7.97 2.67 6 12 1.38 2.0 1.5 Indirect 4 * Figure restated 09 1.68 due to a 1.0 10 1.64 2 reclassification 0.5 11 2.02 0 08 09 10 11 12 of claims. 0 09 10 11 12 12 2.05 Kmart Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 350 100 1.2 300,000 800 0.20 300 700 775 767 1.0 1.08 313,702 311,668 1.06 310,391 1.05 75 0.15 1.04 303,397 600 658 0.99 250 0.8 500 257,087 200 50 0.6 250,000 0.10 400 150 0.4 300 100 n/r 25 0.05 n/r 200 50 0.2 100 0 08 09 10 11 12 0 0 08 09 10 11 12 200,000 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 12 12 Direct 09 1.02 11.85 11.31 10 11.56 10 10 2.35 11.18 10.74 11 0.74 8 8 9.26 9.02 12 1.15 6 6 6.88 6.78 Indirect 4 4 09 10.83 10 4.53 2 2 11 10.57 0 08 09 10 11 12 0 09 10 11 12 12 10.41 Wesfarmers Sustainability Report 2012 7
Sustainability at Wesfarmers Scorecard (continued) Industrial and other businesses Insurance Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 15 10.0 0.10 35,000 120 0.04 119 113 100 13,917 12 0.08 28,000 0.09 13,405 7.5 12,975 0.03 12,789 0.09 12,236 0.08 0.08 0.08 9 80 0.06 21,000 5.0 60 0.02 73 80 66 6 0.04 14,000 40 3 2.5 0.02 0.01 7,000 20 0 08 09 10 11 12 0.0 0.00 08 09 10 11 12 0 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per FTE employed (RHS) Megajoules per FTE employed (RHS) Megalitres per FTE employed (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 4.0 1.0 Direct 09 0.84 0.96 0.8 10 0.96 3.70 0.84 3.0 11 0.41 0.6 12 0.38 2.71 2.0 2.22 Indirect 0.89 0.4 0.83 0.44 09 n/r 0.38 1.0 10 0.00 0.2 11 0.03 0 08 09 10 11 12 0 09 10 11 12 12 0.00 Resources* Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 800 10.0 6 30 4,000 350 700 5 24 715,388 3,654 707,725 3,402 600 694,026 7.5 689,933 3,000 614,619 500 300 3,045 4 18 4.31 4.13 2,707 4.00 3.94 2,742 400 5.0 2,000 3.33 300 3 12 200 250 2.5 6 1,000 100 2 0 08 09 10 11 12 0.0 0 08 09 10 11 12 0 08 09 10 11 12 0 200 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Kilograms CO2e per Bank Cubic Metre moved (RHS) Megajoules per Bank Cubic Metre moved (RHS) Megalitres per million tonnes of coal produced (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 8.0 1.0 Direct 09 0.86 0.8 10 0.68 7.20 0.87 0.86 6.0 11 0.83 12 0.55 0.71 0.6 2.53 0.60 4.0 Indirect 2.14 0.4 1.63 1.28* 09 n/r 2.0 *Figure restated due 0.2 10 0.03 to reclassification 11 0.04 *Resources divested Premier Coal in December 2011 0 08 09 10 11 12 of claims. 0 09 10 11 12 12 0.05 and data is excluded for FY12. 8 Wesfarmers Sustainability Report 2012
Chemicals, Energy and Fertilisers (WesCEF)* Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 2,500 5 20 30,000 5,000 6 4 18.25 2,000 4,000 17.88 17.93 15 4,347 4,220 4,143 2,024,587 2,022,741 20,000 4 15.16 1,862,605 14.66 1,811,792 1,500 3 3,630 3,591 3,000 1,625,504 10 1,000 2 2,000 10,000 2 1 5 500 1,000 0 08 09 10 11 12 0 0 08 09 10 11 12 0 0 08 09 10 11 12 0 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO 2e per tonne of chemicals produced (RHS) Megajoules per tonne of chemicals produced (RHS) Megalitres per thousand tonnes of chemicals produced (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 8 0.8 Direct 09 0.69 10 0.44 0.69 6 0.6 11 0.29 6.50 12 0.49 0.49 2.60 4 0.4 4.59 0.45 Indirect 4.05 3.82 09 0.00 0.29 2 0.2 10 0.01 11 0.00 *WesCEF divested the enGen business in 0 08 09 10 11 12 0 09 10 11 12 12 0.00 August 2011 and data is excluded for FY12. Industrial and Safety* Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 250 250 1.5 800,000 300 0.16 243,071 250 232,733 200 200 1.2 600,000 0.12 254 242 1.21 200 1.11 150 150 0.9 400,000 150 0.08 33,546 100 0.6 30,014 100 25,231 100 0.20 63 0.19 0.19 55 n/r 200,000 0.04 50 50 0.3 50 0 08 09 10 11 12 0 0 08 09 10 11 12 0 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per $m of revenue (RHS) Megajoules per $m of revenue (RHS) Megalitres per $m of revenue (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 5 1.5 Direct 09 0.13 4 1.2 10 0.17 4.60 1.31 11 0.38 3 0.9 12 0.22 1.61 Indirect 2 0.6 2.40 2.41 2.34 0.22 09 0.05 0.21 0.18 10 0.04 1 0.3 11 0.93 *Data includes Coregas from July 2010; it was 0 08 09 10 11 12 0 09 10 11 12 12 0.00 previously part of the (then) Energy division. Wesfarmers Corporate Office Greenhouse gas emissions Energy use Water consumption Tonnes CO2e:’000 Petajoules Megalitres 6 30 0.025 80,000 8 0.05 5 24 0.020 0.04 5,294 7 60,000 6 4 2,370 18 0.015 0.03 3 40,000 4 1,353 12 0.010 0.02 4 4 2 0.01 0.01 0.01 0.01 n/r n/r 716 3 20,000 2 n/r 1 6 0.005 0.01 0 08 09 10 11 12 0 0 08 09 10 11 12 0 0 08 09 10 11 12 0.00 Greenhouse gas emissions (LHS) Energy use (LHS) Water consumption (LHS) Tonnes CO2e per FTE employed (RHS) Megajoules per FTE employed (RHS) Megalitres per FTE employed (RHS) Safety performance Community contributions Lost time injury frequency rate A$m 5 10 Direct 09 4.78 10.20 4.85 4 8 10 3.70 11 10.19 3.72 6 12 4.78 3 4.79 4.79 Indirect 2 4 09 0.01 0.00 0.00 0.00 0.00 1 10 0.02 2 11 0.01 0 08 09 10 11 12 0 09 10 11 12 12 0.01 Wesfarmers Sustainability Report 2012 9
Engaging our stakeholders Working with our stakeholders, including suppliers, customers, employees, interest groups and community partners helps ensure we create long-term value – and provide satisfactory returns for our shareholders. During the year, several hundred employees enjoyed a family event at the Art Gallery of Western Australia’s exhibition Picasso to Warhol: Fourteen Modern Masters from The Museum of Modern Art, New York *All works by Giorgio de Chirico, courtesy The Museum of Modern Art, New York and Art Gallery of Western Australia. For full artwork credits, see page 72. 10 Wesfarmers Sustainability Report 2012
Sustainability at Wesfarmers • Employees – various internal employee which has assisted in broadening Engaging our groups (such as the Community Involvement Committee and the the range of phosphate rock that can be sourced. Phosphate rock stakeholders Wesfarmers Indigenous Network), regular updates from the Group from the Western Sahara is not part of WesCEF’s import program for the Managing Director available online coming production year. WesCEF via webcast, the ‘big Aussie BBQ’ for reports further on this issue in its the Queen during the Commonwealth business unit report on page 58. Heads of Government Meeting in Perth, • The role of Coles in the milk supply Leadership Conference, the Wesfarmers chain in Australia was subject to Arts program. questioning and criticism from some • Shareholders – annual general meeting, stakeholders. The issue related to meetings with institutional investors, Coles reducing the shelf price of its bi‑annual investor briefings, quarterly own brand milk across Australia as part retail sales briefings and other updates. of the ‘Down Down’ prices campaign • Suppliers – meetings with key industry and the suggested impact this may groups, audit and review systems for have on some dairy farmers. Coles and Stakeholder engagement Wesfarmers have spent considerable Wesfarmers and its businesses have a responsible sourcing. time and resources working through large number of stakeholders with varying • Government and regulators this issue and Coles reports on the interests across a number of different – meetings with state and federal matter in its business unit report on countries. Engaging these stakeholders government representatives, federal page 33. is an important part of our business. regulators, trade associations. • Stakeholders requested more detail All of our business units nurture and • Non-government organisations on employee satisfaction information manage their own relationships specific – joint projects and initiatives, collected by the Group. Each of to their operations – whether it’s in stores, visits and meetings. our businesses regularly conducts at mine sites, offices or industrial facilities. employee satisfaction or other surveys During the year, Wesfarmers also engaged In the business unit reports (which start for a variety of purposes consistent a third party to conduct a Stakeholder on page 28) there are many references with the business objectives and the Engagement Survey in relation to its to these different types of engagement issues they are managing. There are sustainability performance and reporting. with customers, suppliers, regulators, several different styles of surveys used, The executive summary of this report is community groups, or public interest with varied objectives and different published on our website. Some of the groups relevant to each operation. timings so it is difficult to provide a key outcomes and comments from the All of our businesses operate in accord snapshot of employee satisfaction report are set out below. with the ethical approach required by in the Group at any one time. our Code of Conduct (available on our • The survey indicated we currently have website), including having a transparent positive stakeholder relationships. • The stakeholder survey also suggested and honest approach when working that each business unit should disclose • WesCEF’s sourcing of some of its material issues specific to its business, with stakeholders. rock phosphate (for the production and also more information on how we At a Group level, Wesfarmers is also of superphosphate fertiliser) from are improving our supply chains. engaged with a wide cross-section of the Western Sahara region in north stakeholders. In addition to the various west Africa was raised by some The survey also demonstrated that our ongoing connections we have with these stakeholders. WesCEF has engaged performance on sustainability issues was stakeholders, the following summary with interested parties for several years important to the future of our company. covers the major contact we have had. about the sourcing of phosphate rock ur Code of Conduct and O from Western Sahara, and our trade the executive summary of our • Customers – feedback via letters, is in accordance with applicable laws. Stakeholder Engagement Survey email and website. WesCEF has invested more than are available on our website $5 million in a technology seeking www.wesfarmers .com.au to reduce odours created by the manufacturing process when using phosphate rock from other sources, Wesfarmers Sustainability Report 2012 11
Sustainability at Wesfarmers Engaging our stakeholders (continued) Doing the right thing – Our people We establish inclusive cultures through Bunnings’ timber actions As one of Australia’s largest private a variety of Group-wide policies and employers, with diverse domestic and processes, including a Code of Conduct, Legally sourced quality products international businesses, we consider a Group Whistleblower Policy, and Equal that can be trusted by all customers our team members to be central to our Employment Opportunity Policy. is a central platform in Bunnings’ success. Employing outstanding people Gender diversity continues to be a approach towards sustainable timber and providing opportunities for them priority for the Group. As at the end procurement. With a zero tolerance to apply their talents is critical to our of the reporting year, 57 per cent of approach to illegal timber in its sustainability. While strong assets and our employees are women. Two of supply chain for a decade, Bunnings strategies are important, it is our people our eight non-executive directors has been proactively engaging with who deliver results. (25 per cent), 21 per cent of Wesfarmers’ key suppliers, industry groups and government to continually look for senior executives (general manager opportunities for improvement in Who are we and where do we work? level or above), and 28 per cent of all sourcing sustainable timber. The majority of our workforce is located management and professional employees in Australia and New Zealand (see across the Group are women. The In 2004, Bunnings became the first figure 1) and our employees worked more Wesfarmers Diversity Policy outlines retail partner of the WWF Global than 219 million hours. This equates to four core objectives which are used Forest Trade Network, an organisation approximately 115,000 full-time equivalent to measure performance in this area. established to end illegal logging and team members. unacceptable timber practices. • Foster an inclusive culture – Wesfarmers is committed to continually Wesfarmers divisions undertake In June 2009, Bunnings was the improving the attraction, development and different initiatives and practices based lead signatory to a joint industry, retention of talented people. We do this by on the needs of their business, such community and conservation group providing great job opportunities, rewards as flexible work practices at senior statement (led by Greenpeace) which for good performance, and safe working levels and paid parental leave. Specific called for a federal government ban environments. Wesfarmers recognises the targets are linked to senior executive on the importation of illegally logged importance of being an inclusive employer, key performance objectives under timber into Australia. Bunnings was because a diverse workforce delivers the annual incentive plan. also part of a Common Platform significant social and commercial value. supporting the Illegal Logging Prohibition Bill, which was presented to the federal government in April 2011. Bunnings now sits on the Advisory Panel for the proposed legislation. Figure 1: Employee numbers in various locations (as at 30 June 2012) Most recently, Bunnings partnered China, India, with WWF in the ‘Love Your Forests’ ASIA Bangladesh 561 campaign aimed at building customer and Indonesia awareness on the benefits of certified timber products. Bunnings also played a significant role in a joint timber New Caledonia industry, retailer and non-government 1 organisation steering group led by NT Planet Ark, which developed the first 1,954 QLD national wood products forum and 39,403 workshop in May 2012. WA 23,556 SA With this ongoing commitment to 12,377 NSW timber procurement, more than 55,215 99 per cent of Bunnings’ whole timber products are now legally VIC ACT 56,074 sourced from low-risk plantations 2,813 or other verified forest operations. NZ UK 6,136 156 TAS 3,384 12 Wesfarmers Sustainability Report 2012
As one of Australia’s largest private employers, with diverse domestic and international businesses, we consider people to be central to our success. Employing outstanding people and providing opportunities for them to apply their talents is critical to our sustainability. While strong assets and strategies are important, it is our people who deliver results. • Improve talent management – at least Investing in our people The safety of our employees once a year, the Group Managing Given the autonomous nature of our Workplace safety remains Wesfarmers’ Director meets with each division to Group operating structure, training highest priority and we have an obligation review: senior leader performance and development is a core responsibility to do all we can to ensure the safety in the and development; succession plans of the business units. Our recorded workplace of everyone who works for our for critical roles; and the pipeline of commitment in training and development company, our visitors and customers. high-potential leaders. During the exceeded 2.2 million hours across To that end, we have implemented a 2012 financial year, talent reviews the Group. In addition, key human Group-wide review focused on safety were conducted with all divisions for capital development policies and performance, workplace safety behaviour senior manager level employees and practices, including those focused on and improving outcomes. above and included 138 women. senior management remuneration, We have a Group target of reducing This is in addition to detailed talent development and succession planning, accident rates by 50 per cent each year reviews conducted with employees are managed at a Group level. towards a goal of zero. The primary by individual businesses within the measures are the lost time injury Wesfarmers Group. Throughout the frequency rate (LTIFR) and the total 2.2 million Group, all high-potential leaders benefit recordable injury frequency rate (TRIFR). from development opportunities, such as internal and external development hours of training For the reporting period, the Group programs, stretch assignments, and development LTIFR was 10.90 (see figure 2 on page 14), action learning projects, coaching, down from 12.89 for the previous year. mentoring and 360-degree feedback. The TRIFR at year end had increased to 42.67, compared to 40.94 in July 2011. • Enhance recruitment practices – during Innovation is also important to the success the year, 37 per cent of externally of our businesses. If our people continually recruited positions and 30 per cent of innovate, providing better products, internal promotions (all manager level and above roles) were filled by women. services or solutions to our customers, sustainable growth will be generated. 15.4% decrease in LTIFR • Ensure pay equity – a pay audit is Wesfarmers seeks to develop a conducted annually on a Group basis culture that encourages the boldness (which includes a review of gender and creativity necessary to drive pay equity). Results are reviewed by innovation. This year, for the first time the Board and divisional managing There were 2,395 lost time injuries (LTIs) we implemented an Innovation Awards directors. In addition, a pay equity over the year across all businesses in the program. The initiative was run across review of all Wesfarmers divisions was Group and 9,378 total recordable injuries the Group and focused on five categories: undertaken during the year, in line with (TRIs), which include LTIs and medical environment, customer, commercial, previous years, which did not indicate treatment injuries. While the improvements safety and people. The response was any observable discrepancies in pay in LTIFR and the number of LTIs are excellent, with the entries all reflecting a across each level, after taking into pleasing, we continue to believe that high level of innovation quality. account performance, experience, greater performance is both possible location and job nature. In September 2012, we held the and necessary. Wesfarmers Leadership Conference, In respect to workplace relations, LTIFR and TRIFR remain the main which brought together approximately we recognise the right of those we Group-wide measures of safety 400 senior leaders from across the employ to negotiate either individually performance. However, operating Group. The conference provided an or collectively, with or without the businesses are encouraged to use a opportunity to reinforce expectations involvement of third parties. The large range of broader measures to promote for our leadership culture, introduce majority of our employees (more than a more proactive approach and support key leadership insights and opportunities 80 per cent) are covered by collective a culture of safe work practices. for growth, share best practices across agreements. At the same time, the the businesses, and recognise the The number of workers’ compensation company believes in maximising the Innovation Award winners. claims increased slightly from 9,334 in flexibility of workplace arrangements 2011 to 9,380 this year and the Group available to employees and data is shown in figure 3 on page 14. their managers. Wesfarmers Sustainability Report 2012 13
Sustainability at Wesfarmers Engaging our stakeholders (continued) Figure 2: Lost time injury • the team from the Blackwoods • a campaign titled ‘Simply Safer’ was frequency rate (LTIFR) Protector distribution centre in run across Bunnings in March 2012 15 Highbrook, New Zealand, developed to seek ideas from team members on a drum trolley to move heavy drums. improving health and safety. More than 12 13.06 This has had a significant effect 1,200 ideas were received with many 12.89 10.95 10.90 9 in reducing the number of manual being implemented immediately. 9.94 6 handling injuries he safety outcomes of our business T 10.90 3 • a new positive performance safety units, and the Group data, can be 0 08 09 10 11 12 indicator was introduced at Kmart. found in the Data Bank on page 69. It was implemented to provide feedback to stores on their compliance Our community Figure 3: Workers’ compensation to the operational safety plan. Community contributions claims and partnerships This assisted with focusing store 9,500 efforts and identifying opportunities The continuing successful operation of 9,350 for improvement the Group’s businesses, in an ethical and 9,380 9,378 socially responsible way, is the cornerstone 9,334 9,314 9,200 • at CSBP, a business within WesCEF, of our contributions to the community. 9,050 a strategy was completed to move 9,040 We believe in supporting the communities 9,380 8,900 to a best practice solution for in which we operate by direct and 8,750 08 09 10 11 12 medical, health, injury management, fitness to work and manual handling indirect assistance to organisations and Note: For definitions of LTIFR and TRIFR please refer to risk management in an industrial activities that provide a public benefit. The the Glossary on page 72. environment Wesfarmers Board, in relation to its direct community contributions, gives preference • the launch of a ‘Target your Safety’ to activities focused on medical research To meet the ongoing challenges of DVD at Target, raising team member and health, Indigenous partnerships, creating a safe environment for all the awareness of the major mechanisms education and the Wesfarmers Arts people in our workplaces, there have been of injury; manual handling, hitting program. Our individual businesses may a number of initiatives across the Group stationary objects and slips, trips also provide support in these general which have resulted in positive change. and falls areas, but in addition have community Some of the highlights included: support programs tailored to their business activities, customer base and the communities in which they operate. Safety training at WesCEF Safety at WesCEF is supported through employee competence in operating complex facilities. This is achieved through training supported by a technical and safety training group within the WesCEF Health, Safety and Environment team. A new model for developing technical training in the Kleenheat Gas Kwinana production facility has been so successful in the last 12 months that the same model is being used in other areas of the business. During 2011, a need to improve knowledge management and develop high-quality training material for plant operations at the Kwinana gas production facility was identified. After struggling to build momentum it was established that the volume of improvement projects combined with the objective to develop competency‑based training quickly meant external resourcing was necessary. A registered training organisation (RTO) was engaged to gather information from the experts (engineers, supervisors and operators) and develop training modules. What would have been a five-year project using existing training development models has become a two‑year project. Working with the RTO has also enabled training materials to be aligned to National Standards. The developed model has since been used in Kleenheat Gas’s Kwik-Gas plants, with similar success, and will soon be used in other areas of the business. 14 Wesfarmers Sustainability Report 2012
Wesfarmers has long held the belief that to have a healthy business, you must have strong, vibrant communities in which to live and work. Our direct and indirect community Figure 4: Focus of our direct partnerships and contributions community contributions in 2012 ($m) were $72.24 million in 2011/12. Our direct community contributions were 0.9 per cent of earnings before interest and tax ($3,549 million) and 1.5 per cent of net profit after tax ($2,126 million). $31.82m $72.24m Direct and indirect Community 74.76% community partnerships Health 12.55% and contributions Arts and culture 4.62% Education 2.80% The Woorabinda community To ensure consistent reporting on Environment 2.32% With the diversity of our operations, our Group community contributions, Indigenous people1 1.51% and the broad network of our Wesfarmers engages the London Other 1.16% locations, we have many touch points Benchmarking Group (LBG). This allows Emergency relief 0.28% with local communities across both organisations to define their community Australia and New Zealand. As a Note: contributions according to standard 1 Contributions to Indigenous people in this table result, while Wesfarmers Limited has definitions and policies. represents only that support that can be separately a number of significant partnerships, identified. Support in other categories also goes in LBG undertakes a verification process part to Indigenous people and organisations. all of the business units also have across the Wesfarmers Group excluding their own partnerships and initiatives Home Improvement and Office Supplies which have been developed directly (HIOS) and provides a report, as well as a The business unit sections in this with their local community groups. verification statement which can be found report provide more detail on the major community partnerships that our At Wesfarmers Resources, the on page 67. operations at Curragh have engaged businesses are involved with. The major The community contributions from HIOS partners are a large number of community, positively with the Woorabinda were assured by Net Balance as part education and sporting groups in local community in the Bowen Basin for of its overall assurance of this report. communities, organisations supporting several years by supporting job The Assurance Statement on page 70 children, community support and welfare expos, training initiatives at the mine provides specific comment on their organisations, organisations supporting providing career opportunities, community contributions. health outcomes and research and support supporting the delivery of drug and for education and literacy initiatives. alcohol education to primary school Our total direct community contributions children through Life Education this year decreased from 2011, primarily ore information on LBG’s M Australia and by visits by the because fortunately there have not been standard definitions and policies Queensland Theatre Company, any large-scale disasters in Australia is available at the LBG website which has brought the arts and and New Zealand. In the previous years, www.lbg-australia .com skills workshops to the children Wesfarmers and its businesses made of Woorabinda. significant contributions to emergency urther information on our community F relief and recovery following major fire, contributions can be found in the flood and earthquake disasters. Data Bank on page 69. The large majority of our indirect community contributions were focused on community support, but we are unable to assure this to the level necessary, because most of the funds we facilitate are spent by our partner organisations. Wesfarmers Sustainability Report 2012 15
Sustainability at Wesfarmers Engaging our stakeholders (continued) Wesfarmers Arts The award-winning Wesfarmers Arts program continues to provide major ongoing support to a number of premier Australian arts companies. With a focus on increasing the opportunities for the community to experience quality art and culture from Australia and the world, Wesfarmers has been working in partnership with both national and Western Australian arts companies since 1985. Our belief is that a vibrant cultural sector makes a positive contribution to the lives of all Australians. Highlights of the Wesfarmers Arts program included the launch of Wesfarmers Arts as Indigenous Art Partner with the National Gallery of Australia, presenting the Gallery’s national schedule of exhibitions and public Responsible sourcing At 30 June 2012 we had approximately programs and Indigenous art education to While the majority of our expenditure on 3,316 direct importers across the Group communities across Australia. Wesfarmers products, employee costs and services is and during the year 1,497 of these Arts was also announced Principal Partner in Australia and New Zealand, many of our (45.1 per cent) had been engaged in of the West Australian Symphony Orchestra businesses source products from other our verification or audit processes. from 2012 and took on the role as Lead countries, predominantly Asia and India, Audit processes were completed either by Donor in the development of the new State but also from Europe, Africa and South our employees or qualified auditors acting Ballet Centre in Western Australia. America. In our industrial businesses, this directly for our businesses. The purpose sourcing is mainly complex engineering of the audits is generally to check In addition to the arts support program, the products, bulk fertilisers and chemicals compliance and work with suppliers to company’s nationally recognised Collection or other raw materials. rectify any issues found. During the year, of Australian Art is shared with the public through exhibitions and loans to galleries Most of our sourcing of products from 11 factories were deregistered due to across the country. In recent years, in other countries is undertaken by our retail poor social compliance or other reasons. recognition of the company’s increasing businesses and Wesfarmers Industrial These instances are reported in the business presence in New Zealand, the and Safety. Each of these businesses has relevant business unit section of this report. scope of the collection has broadened detailed policies and codes that govern to encompass the work of significant their responsible sourcing activities in contemporary New Zealand artists. Wesfarmers also supports the arts through other countries, whether the sourcing is directly through manufacturers working 45.1% for our businesses, or indirectly through Percentage of our direct various business unit initiatives such as importers engaged in our other suppliers. These policies and codes sponsorship of the Queensland Theatre assurance processes are supported by extensive audit and Company’s regional program by our review systems conducted either by our Resources division and the acquisition businesses themselves, or through relying of Indigenous art works by the Industrial In addition, the phosphate rock (a key input on mutual accreditation audit systems and Safety business unit. for superphosphate manufacture) sourced with other international retailers. Each retail business provides some detail on from a mine in Western Sahara (where their approach to responsible sourcing CSBP buys about three per cent of the in their section of this report and our mine output) is the subject of international progress in this area is regularly reported comment in relation to the status of the to the Wesfarmers Board through the Indigenous Saharawi people of the region. Audit Committee. We have reported on this in previous reports and the WesCEF section of this report again provides an update on our approach. 16 Wesfarmers Sustainability Report 2012
Sustainability at Wesfarmers Reconciliation Action Plan As a large employer, we realise the role we can have in providing genuine, sustainable employment opportunities for all Australians, including Aboriginal Australians. We are committed to ensuring that our businesses are places where Aboriginal and Torres Strait Islander people feel welcome and valued, as employees, customers, suppliers and citizens. Outcome of workforce surveys (RAP) Self-identified Aboriginal employees Survey response Business unit Number rate (%) % of respondents 2011 2012 2012 2012 Coles 424 695* NA NA Bunnings 43 121* NA NA Office Supplies 36 53 87 1.1 Target 295 103 22 2.1 Kmart 123 105 54 0.7 Insurance 16 12 85 0.6 Resources 24 17 98 2.6 WesCEF 9 9 54 1.2 Industrial and Safety 41 47 83 1.9 Corporate Office 1 2 80 1.1 Group total 1,012 1,164 62 1.1 * Survey not conducted in 2012. This data represents 2011 data plus new employees in FY12 who self-identify as Aboriginal. Our Reconciliation Action Plan (RAP) Building relationships We appreciate the critical importance of outlines the measurable actions we are All of our business units had team strong leadership in relation to our RAP. committed to across the Wesfarmers members who participated in the Jawun We have prioritised activities that build Group, with an overarching goal of having Secondment Program. This year we the cross-cultural competence of our a workforce that reflects the diversity of provided 18 one-month secondees and leaders; to date, senior managers in six the communities in which we operate. one three-month secondee. We also business units have completed cultural sponsored the inaugural Jawun Emerging awareness training. Main highlights Leaders Tour, in which 11 emerging leaders Welcome to Country and Acknowledgement Creating opportunities from four Jawun regions were involved in a of Country protocols were observed at Over the past year, three business units specialised regional tour, sharing learnings major events, including the Wesfarmers and Corporate Office implemented and receiving leadership training. 2011 Annual General Meeting. Aboriginal employment programs with Many business units have been focused customised recruitment, training and Wesfarmers continues to support Aboriginal on developing relationships with Aboriginal support mechanisms. An additional four communities and cultures through its Arts community members, organisations business units supported community- program. During the year, Wesfarmers was and service providers to support their driven Aboriginal employment programs. announced as the inaugural Indigenous Art Aboriginal engagement and employment As a result, our overall Aboriginal employee Partner of the National Gallery of Australia, strategies. For example, WesCEF team numbers increased from 1,012 to 1,164. presenting the Gallery’s national schedule of members participated in Kwinana, This is 0.6 per cent of our total employees. Aboriginal exhibitions, public programs and (Western Australia) Aboriginal community education. The Wesfarmers Arts National events and the Wesfarmers Industrial and Indigenous Arts Fellowship program, also 15% Safety Indigenous Steering Committee held a meeting at the National Centre of in association with the National Gallery, entered its third year, with 32 individuals increase in employees Indigenous Excellence in Redfern, Sydney. from Aboriginal communities across self-identifying as Within the Wesfarmers Group, we have Australia participating in the Fellowship Aboriginal an established Wesfarmers Indigenous Leadership program since its inception Network, a forum where all business units in 2010. can share Aboriginal engagement and Nearly all of our business units entered into employment learnings. ur full report against the actions O purchasing relationships with businesses identified in our 2012 RAP and certified by the Australian Indigenous Fostering respect the 2013 RAP can be found Minority Supplier Council (AIMSC). Building respect and understanding under the ‘Reports’ section of Aboriginal people and their cultures at www.wesfarmers .com.au within our businesses is an important aspect of our RAP. Wesfarmers Sustainability Report 2012 17
Looking after our environment A healthy environment is a fundamental right and expectation of all communities. With operations that include retail outlets, coalmines, chemical, energy and fertiliser manufacturing, and insurance, Wesfarmers’ activities are complex and widespread. We have a responsibility to all of our stakeholders to manage our operations in such a way that it reduces our environmental footprint. 18 Wesfarmers Sustainability Report 2012
Sustainability at Wesfarmers Looking after What does our greenhouse emission reporting cover? Reporting greenhouse emissions across many different business activities, under our environment a variety of legal and voluntary reporting mechanisms, has the potential to create confusion in understanding our emissions. We are continually trying to improve both the methodology we use to calculate our emissions and the communication of that information, while maintaining the accuracy required for our corporate governance and the requirements of the external assurance and auditing we undertake. The basis of our greenhouse emission and energy use data in this report is the National Greenhouse and Energy Reporting Act 2007 (NGER Act) in Australia (where more than 99 per cent of our emissions occur). The NGER Act covers only Scope 1 and 2 emissions, but does not include some significant emission sources (such as the sodium cyanide business at our Kwinana operations). The data under the NGER Act is also bound by the concept of operational control which means, for example, that emissions from a business part-owned by Wesfarmers but operated by a third party is not included (an example is Air Liquide WA within WesCEF which is reported by Air Liquide Australia). However, to assist in understanding our total emissions profile we include various Scope 3 emissions Minimising our environmental in this report (including electricity and gas transmission; waste disposal and waste water footprint treatment; air travel emissions; an estimate of transport emissions in our supply chains; Looking for innovative solutions with good and the Scope 3 emissions associated with liquid and gaseous fuel use). The diagram commercial and environmental outcomes below provides a summary of these emissions and how they are additional to our NGER is critical to the sustainable success Greenhouse Act reports. gassome As a result, emissions of our data is not directly comparable year on year, but of our businesses. Taking a long-term where possible this is explained. approach to managing our businesses is not only good for the environment, but it contributes to the resilience and Greenhouse gas emissions NGER Act1 sustainability of our businesses as well. Scope 1 & 2 emissions 4,666,196 With the diversity of our Group, each of tonnes CO2e our businesses face different challenges in their management of the environment, 68.4% which in turn means our responses vary widely. This year for the first time, we are reporting Transport emissions Non-NGER Act2 in supply chain5 Wesfarmers Group Scope 1 & 2 emissions both absolute and relative metrics for our greenhouse gas emissions, water use 650,925 total 286,214 and energy use. Using relative measures tonnes CO2e 6,818,568 tonnes CO2e provides a more accurate comparative 9.6% tonnes CO2e 4.2% measure across a number of years, FY11 = 7,698,837 despite potential changes in business operations, for both our company and in 11.4% reduction comparison to other similar organisations. During the year, Wesfarmers sold two subsidiaries: Wesfarmers Premier Coal Equity share of joint venture/ Scope 3 Limited (Premier Coal) in December 2011; investment emissions4 emissions3 and Energy Generation Pty Ltd (enGen) in 347,018 868,215 August 2011. Data covering the ownership tonnes CO2e tonnes CO2e period is included in the Data Bank on 5.1% 12.7% pages 68 and 69. However, it is not included throughout the rest of the report. 1 Audited by Ernst & Young (FY11: 5,044,231). 2 Assured by Net Balance (FY11: 564,978). 3 Assured by Net Balance (FY11: 740,082). 4 Provided by entities from their FY12 NGER Act records (FY11: 589,546). 5 Estimate based on data and assumptions, assured by Net Balance (FY11: 760,000). Wesfarmers Sustainability Report 2012 19
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