Since the early nineties, large retailers have been reporting on their environmental issues. Then, they included the social dimension to the environmental report.
Now, the trend is that large retailers publish sustainability reports with indicators generally elaborated by themselves. (comparability between two retailers reports)
In 2002 two retailers issued a sustainability report based on some of the GRI Guidelines (Carrefour, Kesko) . We will study those two as being representative of the sector. This does not discard the other reports which are also relevant.
Improving the reporting system by identifying relevant performance indicators:
The group reviewed: Ethical rating agency questionnaire The new French Economic Regulation making environmental and societal reporting compulsory for listed companies The GRI guidelines The goals set out in the first Sustainability Report The indicators used by other companies in the retail sector to facilitate comparison of the Carrefour performance with that of their competitors
in 2002, 21 countries participated in the Group reporting
Identification of Key performance indicators (KPIs) 1. Consolidated sales excluding VAT and net income from recurring operations after goodwill 2. Number of countries completing the Group sustainable development reporting 3. Number of purchase offices that use the Group’s Quality Scoreboard 4. Number of stores audited on the Group’s hygiene and quality standards. 5. Energy consumption/sales area 6. Water consumption/sale area 7. Water treatment (% recycled)
8. Share of women in management positions 9. Number of supplier facilities audited on social issues 10. Number of days of training per employee, per year 11. Number of Carrefour Quality Line products 12. Number of organic or ecological products
The Carrefour report is based on some of the performance indicators of the GRI (see copy)
Carrefour awards for its 2002 Sustainable Report
Carrefour was listed on the Dow Jones Sustainability Index for the first time
Carrefour has qualified for the first time to “Storebrand Principle Funds” portfolio of ethical companies by Storebrand, Scandinavia’s leading ethical funds manager
15 countries includes a code of ethics in the employment contract of purchasers
Carrefour promote partnership with SMEs entering, among other things, into long terms commitments: In France “the commitment contract” strengthens the business co-operation with 255 SMEs through mutual commitments
Carrefour works in close partnership with their supplier for their own brand products. They set up a product safety programme for its controlled products
Carrefour encourages their suppliers to put in place an Environmental Management System (EMS) even providing some financial aid for that.
The Group compiled a guide to packaging conception, to disseminate best practices throughout the Group. It defines the essential features of packaging including environmental criteria.
In 2002, Carrefour France saved 484 tonnes of raw material (a total of 4 500 tonnes since 1996)
It launched two projects to existing material reduction initiatives: a GMO free vegetal ink for use in paper and cardboard packaging and a new ecological limestone-based material to wrap own brand butter
Carrefour developed a Social Commitment Charter whereby it enforces basic workers’ right as laid down by the ILO, I.e., eradication of slave labour, a ban on employing children under the age of 14, etc
Carrefour created the INFANS association in partnership with the International Federation of Human Rights whose role is to monitor social risks, carry out spot checks and identify local NGOs able to oversee the roll-out of Carrefour’s initiative out in the field
Economic pillar goals: 1. Make quality products available to the greatest number of people 2. Guarantee balanced trade 3. Pay grower a fair price 4. Develop long-term relations with local partners 5. Promote international trade
Societal pillar goals: 1. Uphold human rights, especially those of children 2. Help maintain local jobs 3. Ensure consumer health and safety 4. Promote the sharing of know-how
Kesko is Finland’s leading trading sector marketing and logistics company
Kesko fully owns its subsidiaries: Kesko Agro, Kesko Food (55% of Kesko net sales), Rautakesko and Keswell are responsible for store sites, purchasing, logistics, marketing and chain co-operation with the respective K-retailers.
The Kesko report follows closely the GRI guidelines but not 100%
GRI Environmental indicators not used in the Kesko report: 1.Specifications of supplier practices 2. Information on land-ownership and its impacts 3. Fuel consumption statistics 4. Indicator typical of industrial activities 5. Detailed environmental analysis of water use
GRI economic indicators not used in the Kesko report: 1. The value of research and development 2. Wages and benefits have not been given by country 3. An economic supplier analysis is missing
GRI social indicator not used by the Kesko report The social kesko reporting differs most from the guidelines 1. No information on special programmes for minorities, nor on the ratio of lowest wage to national legal minimum or cost of living 2. The questions relating to child and forced labour, freedom of association are discussed under the standard SA 8000 with the suppliers and not in relation with Kesko personnel
In spring 2003, the diploma was granted to 33K-food stores.
Conditions to get the diploma: the hypermarket director, the employees responsible for environmental affairs and the whole personnel are trained, and that a comprehensive environmental audit is passed. In the audit, made by a third party, assessment is made as to whether the store fulfils the detailed requirements set for awarding the diploma.
The K-environmental store diploma gained international recognition as the UNEP and ICC selected it among the 10 best sustainable developments partnership out of over 120 candidates.