Massmart Annual Report 2008
 

Every year, more than 50,000 tons of toxic electronic goods are thrown away in South Africa, but not always in the right place.

 
 

That's why at Makro we're offering to take back our customers' e-waste for recycling
Fujitsu Siemens e-wast pilot project at Makro in Woodmead

Environment

IMPACTING

We agree with the experts that there is a need for governments, individuals and businesses to be aware of and to make every e ort to minimise the greenhouse gas emissions that are linked to climate change. As retailers, we have a pivotal role to play by encouraging environmentally responsible behaviour by our suppliers and our customers.

Environmental scorecard
Sustainability indicator 2008 2007 2006
Water consumption (R) R10 514 897 R9 337 160 R9 745 654
Electrical consumption (kW) 253 949 546*
Sites with board recycling programmes 120** 159 137
Supplier environmental surveys conducted 28 14 8
Environmental partnerships with suppliers 3***
Greenhouse gas emissions 240 596 metric tons of CO2 Unknown Unknown
* Reported in Kilowatts not Rand value
** Excludes plastics recycling which was included in 2007
*** Osram - CFL recycling, Uniross - battery recycling, Fujitsu Siemens - E waste bin
   
Maplecroft Climate Change Vulnerability Index
Country in which Massmart has a presence Mean Climate Change Vulnerability Index (CCVI) Mean CCVI economy sub-index
Botswana 4,01 High risk 4,60 High risk
Ghana 3,99 High risk 2,89 High risk
Lesotho 3,18 High risk 2,82 High risk
Malawi 3,18 High risk 1,78 Extreme risk
Mauritius Unknown Unknown
Mozambique 3,73 High risk 2,92 High risk
Namibia 3,68 High risk 4,77 High risk
Nigeria 3,18 High risk 2,87 High risk
South Africa 4,27 High risk 4,47 High risk
Tanzania 3,20 High risk 2,45 Extreme risk
Uganda 2,68 High risk 2,20 Extreme risk
Zambia 3,75 High risk 2,36 Extreme risk
Zimbabwe 2,87 High risk 2,61 High risk
Key    
0 to 2,5 Extreme risk  
2,5 to 5 High risk  
5 to 7,5 Medium risk  
7,5 to 10 Low risk  

Source:
Maplecroft Climate Change Risk Report:
www.maplecroft.com

Interpretation Note:
The economy sub-index refres to the risk posed by climate changes to the economy of the country.

2008 Feedback

Create a buyers’ guide to responsible procurement.
We developed and published “The Green Book of Answers, Massmart’s Buyers’ Guide to Choosing Environmentally Friendly Products”.

Engage with willing suppliers to explore ways to reduce packaging waste.
We were unable to enter into a packaging rationalisation partnership. We will maintain this focus in 2009.

Pilot test interventions to help customers make environmentally friendly purchasing decisions.
We researched and developed the Massmart Eco-wise customer advocacy programme

2009 Priorities

Improve the accuracy of reporting to the Carbon Disclosure Project, focusing on Scope three emissions relating to air and car rental travel.

Engage an environmental specialist to conduct an environmental risk assessment of our merchandise assortment.

Interact with willing suppliers to develop an environmental agenda for action that focuses on shared environmental priorities in our supply chain.

ACTUALISING

How we’re addressing environmental sustainability

From our position within the supply chain, we look for opportunities to work as advocates for positive environmental change. The environmental impacts associated with our supply chain are many times greater than those related to our own operations, so we believe it’s in positively influencing our customers and suppliers that we can make the biggest difference.

To understand the impacts better, we survey the environmental practices of our key suppliers and gauge the environmental attitudes of our customers. We also engage suppliers about the environmental commitments they can make and we are talking to our marine and timber products suppliers about their capacity to achieve Marine Stewardship and Forest Stewardship Council certification*.

Furthermore, we’ve committed to exploring partnerships with environmentally progressive suppliers to tackle other big concerns. To reduce electronic waste, recognised as the world’s fastest-growing waste category, we’re piloting an e-waste take back programme with Fujitsu Siemens. To promote environmentally responsible product choices, we’re running more environmentally focused customer promotions on merchandise like thermal geyser blankets, compact fluorescent light bulbs, solar water heaters and low volatile organic compound paints, to name a few.

Procuring greener goods

Supply chain environmental advocacy starts with identifying appropriate merchandise. To help our buyers advocate responsible environmental practice by suppliers, we’ve published a self-help book that encourages both parties to get more involved. The Green Book of Answers provides Massmart’s buyers with a tool to navigate their way through environmental facts and understand the negative impacts relevant to particular product categories. Better informed buyers make better environmental advocates, so the book focuses on five big environmental questions:

1. Can suppliers provide evidence of traceability to source for the raw materials used in their products?
2. Have suppliers implemented an environmental management system to minimise the negative environmental impacts of their operations?
3. Have suppliers considered the environmental impact of their product design?
4. Have suppliers considered the environmental impact of their product packaging?
5. Have suppliers made an effort to disclose relevant environmental information about their products to consumers?

Making customers Eco-wise

The next step in effective advocacy is communicating environmental responsibility to our customers. While appreciative of South Africa’s natural resources, environmental issues do not rate high on the list of priorities for many South African shoppers.

The results of our customer surveys reveal that awareness of environmentally responsible consumerism is relatively low, so we’re developing promotional material to place these considerations top of mind.

Thus, our Eco-wise initiative, is being developed to make it easier for environmentally aware consumers to support progressive suppliers. By highlighting products that have achieved specified externally accredited environmental standards such as Forest Stewardship Council (FSC) certification, for example, we hope to make environmentally responsible choices more visible in our stores*.

Participating in the Carbon Disclosure Project

We appreciate that we can’t advocate responsible behaviour if we don’t demonstrate a willingness to change our own behaviour, so while our greatest contribution may be in supplier and customer advocacy, we also look for ways to improve our own performance.

Massmart recently contracted environmental specialist, Sustbrands, to measure exactly how much greenhouse gas our operations emit. This was a precursor to our participating in the 2008 Carbon Disclosure Project and confirmed that scope two indirect emissions attributable to energy used in our stores is our biggest source of greenhouse gas emissions.

Our carbon footprint measurement project also revealed that our low cost business model is beneficial for the environment because it encourages efficient energy consumption. We estimate that the Group consumes 247kW of power per square meter of operational space per year. This compares favourably to a benchmark range of 230kW/m2 to 300kW/m2 for non-food retailers in the European Union.**

COUNTERACTING

Challenges still to tackle

One dilemma mass merchandisers like ourselves face is distributing goods that are not as environmentally friendly as they could be, but for which there is demand like pesticides, pool chemicals, disposable batteries, computers and chrome plated goods. We’re not sure how to approach this issue, but have made a start by seeking the expertise of external consultants to identify products that are potentially environmentally sensitive and to help us find solutions by, for example, improving on-pack environmental disclosure.

* To be implemented fourth quarter 2008
**   European Union non-food benchmarks provided by UNISA Centre for Corporate Citizenship