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The Woolworths Good Business Journey

Author: Justin Smith- Woolworths Corporate Governance

( Article Type: Sustainable Development )

Sustainability’ is a fundamental part of a company’s governance practices, but also an opportunity to position the company in a positive light to its customers and other stakeholders. An integrated sustainability programme can be a way of managing key social, environmental and economic risks as well as for seizing opportunities for new products, services and markets.

The Woolworths Good business journey programme was launched in April 2007 as a formalisation of Woolworths sustainability commitments. For the past 75-plus years, these issues have been deep at the heart of Woolworths values but the launch of the Woolworths ‘Good business journey’ marked a step change in the way Woolworths operates going forward, ensuring that Woolworths drives a virtuous circle that will benefit all of its stakeholders.

The Good business journey is the result of a comprehensive and systematic review of the way Woolworths addresses the issue of sustainable growth within the context of the changing social and environmental needs of South Africa. The programme is strongly influenced by the sustainability agenda of international retailers, as well as by the Global Reporting Initiative (GRI) guidelines, JSE Socially responsible investment index criteria and other legislative requirements, but places a uniquely South African perspective on these issues via a strong focus on transformation imperatives and social upliftment.

Using the Woolworths Sustainability Index as the strategic framework – a company-wide index that is tailored specifically to deal with sustainability issues that impact Woolworths – over 200 different indicators have challenging 1 to 5 year targets in place, centred on four key priorities: accelerating transformation, driving social development, enhancing our environmental focus, and addressing climate change. Woolworths first priority is to accelerate transformation, with the focus on enhancing BEE, skills development and equity ownership plans, ensuring a collaborative approach with suppliers, government and franchisees, and driving our policy of ‘South Africa first”. 

Woolworths second priority is to work harder to drive social development – poverty drives environmental destruction and that in turn creates more poverty. To help alleviate poverty, we need to expand the existing initiatives of the Woolworths Trust and link with the transformational goals to drive enterprise development. 

The third priority relates to Woolworths impact on the environment, in particular the issue of diminishing biodiversity. Water is one of South Africa’s scarcest natural resources and Woolworths is targeting a 30% reduction in water consumption. A number of programmes are also being established to encourage and protect South Africa’s biodiversity including the adoption of more environmentally sensitive farming practices throughout our supply chain via the Farming for the Future programme.

The fourth priority addresses climate change directly by focusing on reducing Woolworths carbon footprint. Woolworths recognises climate change as an issue requiring urgent action if the risk of serious damage to global prosperity and security is to be avoided. Woolworths will reduce its relative carbon footprint by 30% – this will be achieved through energy efficiencies (reducing relative electricity usage by 30%), and reducing product miles (reducing relative transport emissions by 20%).

The ‘Good business journey’ is a business imperative for Woolworths. Many aspects of it are linked together to generate a multiplier effect - the largest aspect of this multiplier effect can come from broadening Woolworths work with the customer and supplier base. Woolworths existing Supplier Code of Business Principles, against which all suppliers are regularly audited, has been bolstered by Woolworths sharing and encouraging initiatives across the supply chain in critical areas, and encouraging customers to use their purchasing power where it can make a difference to South Africa as a whole. The programme has had a number of benefits so far – identifying opportunities for operational efficiencies and saving costs positioning the company as a responsible corporate citizen to a wide range of stakeholder groups and influences change in the retail sector and its value chains. Impressive Rand savings have been achieved through energy and refrigeration efficiency programmes, packaging reductions, increasing recycled content in products and packaging, and through increased oversight of resource consumption and payments. Customer tracking shows strong support for the Good Business journey, while internal surveys show an increase in awareness around sustainability issues amongst employees, and strong support for ethical business conduct Woolworths has also received a number of local and international awards for the programme including twice being named International Responsible Retailer of the Year, the Mail & Guardian Greening the future award, an energy efficiency award, inclusion in the JSE SRI and consistent top rankings in the South African Carbon Disclosure Leadership index.