Online Annual Report 2009

Climate change and environment

Our stores may be using energy efficiently, but we are not doing enough to help our customers to do the same.



Environment scorecard as at June 2009

Estimated CO2 emissions
392,363 tons
36.0%
Estimated total Group carbon emissions Intensity
387 CO2(kg)/m2
35.0%
Estimated purchased electricity consumption
252 kWh/m2
4.0%
  CDP retail range
210 466 CO2(kg)/m2
SA retail peer
529 681 kWh/m2
     
Estimated purchased electricity emissions intensity
247 CO2(kg)/m2
2.0%
Estimated water consumption
1.8 kl/m2
20.0%

Note: Emissions are reported for the calendar year 1 January 2008 to 31 December 2008 and trading space is taken as at June 2008. Comparative data was provided by Sustbrands and is based on information from two South African retailers and the CDP database.

SA retail peer
517 666 CO2(kg)/m2
SA retail peer
1.4 1.6 kl/m2
 
     

Scorecard commentary

We are pleased that our group-wide electricity intensity of 252 kW/h per square meter falls below the retail range of 529 kWh/m to 681 kWh/m. There is still opportunity to reduce total energy consumption by a minimum of 12% and weve set this as a goal for our Group operations forum to achieve by June 2011. Recognising that this initiative requires ready access to accurate electricity consumption data, we are evaluating a system at 19 Builders Warehouse stores that enables centralised real-time consumption monitoring.

Good progress has been made in the area of carbon reporting and we were pleased to be ranked third in the low emissions category of the 2008 Carbon Disclosure Project (CDP). We have adopted a phased reporting approach which involves extending the scope of our carbon data gathering activities on an annual basis. As such our latest data includes emissions from store waste to landfill and direct import transport emissions, adding 131 558 metric tonnes of CO2 to the total emissions reported as at December 2008.

In the past, wed been concerned that chain-specific climate mitigation and adaptation initiatives were too loosely structured and opportunistic in nature. Weve since commissioned a carbon white paper from Maplecroft and also asked for additional input from Incite Sustainability and, Imbewu Sustainability and Legal Specialists. With the help of their collective findings, weve developed a carbon mitigation and adaptation planning tool to facilitate more structured target-setting and governance in our divisions.

We also launched a survey to assess the climate change strategies of high priority suppliers with the intention of assigning each participant a climate change responsiveness score. The survey was distributed to 66 suppliers and we received 44 completed responses. Fujitsu Siemens, Kimberley Clarke, Dulux, Procter & Gamble, and Unilever emerged as top performers.

A more ambitious project involved engaging KPMG Consulting to build a database to profile ingredients in high environmental impact merchandise categories, such as pesticides. Although implementation has been slow, our aim is to identify, and encourage suppliers to replace, environmentally problematic product ingredients that appear on activist watch lists.

A consumer advocacy highlight was our customers positive response to the Fujitsu-Siemens sponsored e-waste recycling facilities that have been implemented at nine Makro stores. By contrast our Eco-wise environmental consumer awareness programme was less successful with price affordability and divisional buyer apathy emerging as barriers to successful implementation. More determined action has already resulted in an increase in the number of Eco-wise products launched in the first three months of the financial year ending June 2010.

Massmart is committed to:

Achieve a minimum reduction of 12% in total electrical energy intensity [kWh/m2] by June 2011 using 2008 calendar year baseline.

Increase the share of Ecowise sales as a percentage of general merchandise sales by June 2011.