Woolworths Limited's Environment Manager Kane Hardingham presented on the company's sustainability strategy and efforts around ethical and sustainable sourcing from Asia. Some key points included: 1) Woolworths has set targets to reduce carbon emissions and water usage by 2015 and eliminate food waste to landfill by the same year. 2) The company works to source seafood and palm oil sustainably and only use certified sustainable timber and paper products. 3) Over $6.6 million has been invested in sustainable agriculture projects in Australia since 2007 through its Fresh Food Future program. 4) Woolworths aims to protect its reputation and meet customer expectations through a policy applying labour condition standards to all global suppliers and third party

1. The Asia Century
.
Chair: Robyn Leeson, Director, Net Balance Foundation;
Member, GRI Stakeholder Council
Amanda Keogh, Sustainability Manager, Fuji Xerox Australia
Kane Hardingham, Environment Manager, Woolworths Limited
James Porteous, Communications Advisor, MMG

2. GRI Conference
Ethical and Sustainable Sourcing in Asia
Kane Hardingham
Environment Manager

3. woolworths limited
brands
ALH Group
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4. sustainability strategy
strategy
2007–2015
2007-2015
Targets and commitments
Targets 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
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5. the business case for sustainability
Doing the right thing by our business
and 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
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6. sustainable seafood
Our long-term aim is to ensure that all our seafood is sourced
from sustainable sources
We 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.
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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
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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
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9. animal welfare
We support and seek continuous improvement in
standards of animal welfare
Poultry
- Select branded eggs are all free range or barn laid
Sales 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
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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 Australia
WA - Rob Grylls trialling NSW - Murrumbidgee QLD - Boyne Calliope
new fodder speciesfood security.
and for Landcare Network Catchment Group chasing
sheep 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 - SNAG
grass 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. fresh food future
our investment
Advancing 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.
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12. labour conditions in a
global supply chain
While 97% of our fresh food offer is sourced locally in Australia
we source other product categories from a global supply chain.
Objectives:
– protecting corporate and brand reputation
– responding to our customers expectations
Scope:
– 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/vendors
Policy applies to all suppliers but monitoring program applies
to own brands
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13. what does it mean
in 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
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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.
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15. progress so far
Human 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 brands
71.5% of in-scope factories have been audited.
Audit Results – Factory Classification in 2011
Approved 42%
Conditionally Approved 54%
At Risk 4%
Audit Results – Number of Corrective Actions Raised in 2011
Critical 2%
Non-critical - high 75%
Non-critical - low 23%
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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 equipment
Good
Clean, well maintained kitchen and canteens Workers demonstrating correct use of PPE Exit showing emergency lighting
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17. why we joined the
Global 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
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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 improvements
We need to take responsibility too
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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
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20. Questions?
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