@GRIAusConf_The Asia Century - Kane Hardlingham

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@GRIAusConf_The Asia Century - Kane Hardlingham

  1. 1. The Asia Century.Chair: Robyn Leeson, Director, Net Balance Foundation;Member, GRI Stakeholder CouncilAmanda Keogh, Sustainability Manager, Fuji Xerox AustraliaKane Hardingham, Environment Manager, Woolworths LimitedJames Porteous, Communications Advisor, MMG
  2. 2. GRI ConferenceEthical and Sustainable Sourcing in AsiaKane HardinghamEnvironment Manager
  3. 3. woolworths limitedbrands ALH Group 1 3
  4. 4. sustainability strategy strategy2007–20152007-2015Targets and commitmentsTargets and commitments 40% 25% Up to reduction in carbon emissions reduction in carbon emissions 30% on projected growth levels by per carton delivered by reduction in carbon emissions 2015, bringing emissions back Woolworths-owned trucks from our company fleet by 2010 to 2006 levels by 2012 (from 2006 fleet emissions) 200m litres zero food waste Ethical & Sustainable Reduce water usage by at least 200m litres a year by 2010 to landfill by 2015 Sourcing Develop and implement policies for: Ethical sourcing (fair labour and Fairtrade) Animal welfare Palm oil Timber, pulp and paper Fish and seafood 11 2
  5. 5. the business case for sustainabilityDoing the right thing by our businessand Creating shared value employee development – Create economic value for our employee business by addressing social and wellbeing environmental challenges we face. productivity investing in productivity community sha re d creating productivity new markets marketshare new markets longterm customers profitability v addressing al supply chain ue resource/ security/ cost efficiency environmental efficiency longterm impacts security of supply supporting suppliers sustainable sourcing 3
  6. 6. sustainable seafoodOur long-term aim is to ensure that all our seafood is sourcedfrom sustainable sourcesWe are committed to: Working with our suppliers to Providing the right information ensure seafood supplies are helping our customers to make available to feed the needs of informed choices about the our customers today and for sustainability of the seafood future generations. they buy from our stores. 4
  7. 7. palm oil- Global demand for palm oil is being attributed to continued deforestation- Palm oil is an efficient crop and it’s cheap- Woolworths was the first Australian retailer to join the Roundtable on Sustainable Palm Oil (RSPO)- Woolworths aims to use only RSPO certified palm oil in its private label products by 2015- 95% of Select products are palm oil free- Woolworths has introduced on-pack labelling of palm oil , with 46% of products containing palm oil labelled as such (August 2011)- Its an opportunity to drive market transformation but this needs to be managed in a responsible and sustainable way 5
  8. 8. sustainable forestry and timber sourcing- Some concerns about sustainable timber sourcing in Asia- Woolworths increasing requirements for certified sustainable paper and wood products- Select paper goods range is Programme for the Endorsement of Forestry Certifications (PEFC) certified- All catalogues produced on PEFC certified paper- Patio by Jamie Durie (trademark symbol) outdoor furniture range at BIG W is Forestry Stewardship Council (FSC) certified- Not-for-resale office paper is FSC certified- Masters’ wood procurement policy 6
  9. 9. animal welfareWe support and seek continuous improvement instandards of animal welfarePoultry- Select branded eggs are all free range or barn laidSales Growth for Free Range Products Percentage increase Percentage of total Product in volumes in 2011* % category volumes in 2011% Free range chicken (Macro meat) 35.0 12.8 Free range chicken (Macro deli) 212.9 2.3 Free range eggs 12.8 27.6 Barn laid eggs 8.7 10.7 Organic Macro meat 36.4 0.9* Percentage increase based on increased volume from previous financial year.Fresh pork meat- Aim to move to 100% sow stall free pork- 52% of all fresh pork supplied to Woolworths are produced from pigs born to sows reared in a sow stall free environment, and this will increase to 94% by 2013 7
  10. 10. fresh food future objectives Landcare Woolworths Sustainable Farming Project Highlights Our Fresh Food Future program aims to contribute to developing solutions for these challenges and it reaffirms our commitment to investing in the future of rural AustraliaWA - Rob Grylls trialling NSW - Murrumbidgee QLD - Boyne Calliopenew fodder speciesfood security. and for Landcare Network Catchment Group chasingsheep Hanging onto soil parthenium moisture during drought Fresh Food Future draws together a number of initiatives to address two main objectives: – The advancement of agricultural sustainability; and – Building leadership capacity in the sector.NSW - GLENRAC Back to NSW - Bega Cheese NSW - SNAGgrass roots Restructuring dairy Managing soils through operations drought conditions Woolworths is working with Landcare Australia to identify issues impacting on the security of production and supply of food in Australia. Projects are supporting farmers to improve farming practices, water use efficiency, nutrient management and reduction of carbon footprint to support a sustainable food supply. 8
  11. 11. fresh food futureour investmentAdvancing sustainable agriculture – Since 2007, we have invested over $6.6 million to support over 160 projects around Australia in partnership with Landcare – $400,000 through our Fresh Food grants for suppliers.Help build leadership capacity in the sector – Annual investment of over $1.4 million in 2011 with several partners all working on attracting talent to the sector, retaining talent and developing leadership. 9
  12. 12. labour conditions in aglobal supply chainWhile 97% of our fresh food offer is sourced locally in Australiawe source other product categories from a global supply chain.Objectives:– protecting corporate and brand reputation– responding to our customers expectationsScope:– all Woolworths Limited’s businesses and brands– environmental and socio-economic criteria– all products or services imported whether sourced directly or through agents– first tier suppliers/vendorsPolicy applies to all suppliers but monitoring program appliesto own brands 10
  13. 13. what does it meanin practice?- Don’t buy just by visiting showrooms and expos- Visit the factory where product is made- Simple observations and checks when you visit a factory: - look for the age of the workers - the safety measures around equipment – safeguards, personal protective equipment - access to and cleanliness of facilities – toilets in the factory - kitchen area and lunchrooms - access to drinking water - ask to visit the dormitory - Do a pre-order audit before placing an order 11
  14. 14. the real world- We operate in a real world with no ‘Black and White’ simplicity- Our focus is to improve the suppliers’ practices. We are also conscious that contract termination threats will only increase the practice of double books- But we do have our tolerance threshold: - Zero tolerance for bribery - Existing suppliers – we expect improvements to be made in timely manner. - New factories – we won’t place an order until improvements are made. 12
  15. 15. progress so farHuman Rights and Labour Conditions– Policy requirements have been communicated to all suppliers and form part of our Trading terms– We have trained our buying and sourcing teams– We have a comprehensive third party auditing program for suppliers of our own brands71.5% of in-scope factories have been audited.Audit Results – Factory Classification in 2011Approved 42%Conditionally Approved 54%At Risk 4%Audit Results – Number of Corrective Actions Raised in 2011Critical 2%Non-critical - high 75%Non-critical - low 23% 13
  16. 16. what do we find?Bad No PPE beside eye protection for a worker Men’s bathroom facility left in a poor hygienic state Completely blocked fire exit using grinding equipmentGood Clean, well maintained kitchen and canteens Workers demonstrating correct use of PPE Exit showing emergency lighting 14
  17. 17. why we joined theGlobal Social Compliance Program (GSCP)?- To support harmonisation of standards and convergence- To give clarity to suppliers as to the expected benchmark- Convergence is important as it reduces cost in the supply chain- Systemic problems in countries with significant governance issues are beyond one company – power of collaboration- Collaboration with other global brands increases our influence to make improvements- The Equivalence Process provides the ability and confidence for us to accept other companies audits and move focus from auditing to helping with improvement programs 15
  18. 18. what underpins this?- How do we conduct our business to support ethical manufacturing?- Simple measures can help factories to avoid excessive overtime: - better planning and scheduling of orders - be aware of cultural celebrations and Public holidays - build these into your order timeframes- Build long term relationships with the ‘Good’ suppliers - give suppliers continuity of orders = job security for workers- Consolidate sourcing to fewer factories - larger order volumes create better incentive to collaborate in measures such as productivity improvementsWe need to take responsibility too 16
  19. 19. disclosure through the GRI- Woolworths have now issued four annual Corporate Responsibility Reports- Last three were classified as A+ in the GRI application level checks- Our ethical and sustainable sourcing policies and results help us meet many of the Human Rights and Environmental indicators in GRI 17
  20. 20. Questions? 18 11

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