About this Report

This is Massmart’s third sustainability report which continues the established trend of improving the content, scope and structure of our reporting, utilising facilitated internal and external stakeholder feedback. A notable innovation in deriving such feedback was the use of focus groups to assess stakeholder responses to a full “mockup” of this report prior to its publication.

We have extended the scope of our previous report, published in November 2005, by incorporating the following new elements into the current report:
  • Sustainability scorecard that provides a consolidated view of the Key Performance Areas (KPAs) that we track
  • Internal Audit statement verifying the accuracy of the sustainability scorecard
  • Sustainability risk assessment that provides a consolidated description of key sustainability risks and our response to those risks
  • Sustainability performance review that provides a consolidated assessment of the extent to which we achieved the objectives described in our previous report
  • Additional case studies that provide a “feel” for our operational approach to sustainability issues

We are hopeful that the incorporation of these elements has resulted in the creation of a more informative and reader friendly report that presents a fair perspective of Massmart’s sustainability practice for the year ended June 2006.

Should you, the reader, wish to provide Massmart with feedback concerning this report then, forward your views to sustainability@massmart.co.za.

Sustainability philosophy

Whilst our understanding of good sustainability practice has, and continues to improve, our overall philosophy remains consistent with the view expressed in our last sustainability report. This view defines sustainable business practice as “A business approach to create longterm shareholder value by embracing opportunities and managing risks deriving from economic, environment and social developments”.

In practical terms we have first-hand experience of the positive impact that considered sustainability practice has on stakeholder relationships. This is manifest through factors such as better staff productivity and greater credibility in interactions with regulatory and government authorities.

We are also appreciative of the operational efficiencies that may, for example, be achieved through reducing store energy consumption or eliminating packaging waste in the supply chain.

This experience reinforces our belief that good sustainability practice equates to responsible business practice, and that well-managed companies are motivated to act responsibly.

Stakeholder engagement

Massmart is committed to engagement with our stakeholders to promote constructive dialogue about issues of mutual interest.

These stakeholders include our customers, employees, investors and suppliers, as well as Government, community groups, media, non-governmental organisations (NGOs), the Consumer Goods Council of South Africa (CGCSA), legislators and regulators.

We prioritised stakeholder engagement as an important sustainability area during the year in review. This resulted in a number of notable achievements that included:
  • Appointing a public relations advisor to improve the quality and frequency of engagement with external and internal stakeholders
  • Launching a quarterly group news magazine that is distributed to staff, strategic suppliers and other selected external stakeholders
  • Launching quarterly “round table discussions” with primarily external stakeholders to discuss issues of mutual concern, such as the role and expectations of corporates in job creation
  • Simplifying and re-formulating the Massmart Supplier Perceptions survey to enable more frequent administration
  • Establishing closer relationships with organisations representing black entrepreneurs such as the National Industrial Chamber (NIC)
  • Participating in numerous workshops hosted by Empowerdex and designed to gauge the response of business to the codes of good practice on Broad-based Black Economic Empowerment (BBBEE)
  • Establishing a collaborative relationship with the Gauteng Education Department’s Policy Planning Unit to improve our understanding of the educational needs that underpin Massmart’s Corporate Social Investment (CSI) focus
  • Making formal submissions to the Department of Trade and Industry on the second draft codes of good practice on BBBEE and the Consumer Protection Bill
  • Collaborating with the South African Institute of Ethics, at their request, to prepare an ethics case study for the United Nations
  • Voluntary participation in various surveys designed to share knowledge about corporate practice in a variety of sustainability areas such as BBBEE

In all of these instances this engagement was motivated by a commitment to share more information about the Group or to improve our understanding of the expectations of others in order to promote more regular and better informed stakeholder dialogue.

Stakeholder engagement activities

Our relationships with stakeholders are informed by our endorsement of various externally developed guidelines that include the:

  • Global Reporting Initiatives (GRI) sustainability reporting guidelines
  • Universal Declaration of Human Rights
  • Charters of the International Labour Organisation

In most instances these guidelines are codified in the relevant Massmart policy documents.

The following table provides a comprehensive profile of Massmart’s stakeholder engagement activities.

Stakeholder Group
Form of engagement
Investors and shareholdersRegular local and international meetings and briefings, bi-annual results announcements, three trading updates, annual general meeting, annual report, SENS announcements, Massmart website and compliance with statutory disclosure requirements.
EmployeesRegular staff meetings and briefings, performance review and counselling process, “Fireside Chats” for career planning of senior management, adherence to open door policy, group-wide administration of Deloitte Best Company to Work For survey, administration of chain specific surveys and Massmart Ethics Line.
CustomersPrint and electronic advertising campaigns, face-to-face interaction in stores, landscape market surveys, customer focus groups, in-store customer satisfaction surveys, chain specific customer service toll free lines, Massmart Corporate and Chain websites.
CommunityStore-based and Massmart Group level meetings with community leaders and associations, Corporate Social Investment partnering and employee volunteerism.
SuppliersRegular chain specific supplier meetings, annual and bi-annual Massmart Group meetings, strategic planning workshops, one-on-one CEO and senior executive meetings, Supplier Relationship Surveys and Massmart Ethics Line.
Industry and business groupings Active participation in organisations such as Consumer Goods Council of South Africa, Retailers Association, Retail Liaison Committee and Business Against Crime.
GovernmentLodging formal submissions in response to draft and/or established legislation, meeting with national, provincial and local government representatives and quarterly round table discussions.
Non-governmental organisations Direct engagement on issues of mutual interest, social development collaboration and support, meetings and conference attendance.
MediaParticipation in media surveys, interviews, press releases and direct engagement on topical/ public interest issues.