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Report to stakeholders

Sustainability summary

Overview

Environmental, social and governance (ESG) issues are impacting businesses more overtly and with greater urgency. Global debates on the interconnectedness of water, food and energy issues are finding local expression and food-related businesses are coming under pressure to increase their role in addressing food security and associated social challenges.

As a major retailer in South Africa, Pick n Pay strives to address social challenges through the supply of high-quality, affordable food for all South Africans, while providing significant employment and economic opportunities across our supply chain.

• Continued volatility of global commodity prices.
• Global resource availability challenges putting upward pressure on food prices.
• Rising energy prices continue to increase our operating costs. Ongoing efforts to mitigate these increases include reducing electricity usage, eliminating non-essential corporate travel, and further optimising our logistics and distribution network.
• Soil fertility, water demand, fertiliser prices and erratic rainfall are just some of the issues that are of key concern to our local produce suppliers, and all will have an increasing impact on our ability to provide quality food at affordable prices to our customers.
• Partnerships are important in addressing social and environmental challenges. We will continue to pursue opportunities in this regard. A good example of this is the Organic Farmer and Retailer programme, an initiative between Pick n Pay and other supermarket retailers and the Department of Trade and Industry, to facilitate the supply of organic produce from emerging farmers.
• Customer interest in green and ethical products remains strong. While the demand for green and ethical products increases, customers continue to expect price parity in the product offerings. Our attention is therefore focused on meeting these dual requirements.
• Governance and disclosure requirements continue to be developed and enhanced. Demand for greater transparency, accountability and transformation is expected to increase across the full value chain over the coming years.

Within this context, the Group seeks to deliver on a broad sustainability mandate and a wide range of commitments. All of our sustainability initiatives are directed at increasing the agility and resilience of our business, through encouraging innovative thinking and partnerships and the transformation of systems and processes. We will continue to improve and grow, to ensure that we not only become the retailer of choice for all South Africans, but that we lead by example, as a strong and principled corporate citizen, playing an integral role in building a strong and successful South Africa.

This sustainability summary provides a brief, high-level overview of our sustainability initiatives and performance. Our Sustainable Living Report 2013 and GRI index provide a more detailed review and are available on our website at www.picknpay-ir.co.za/sustainability-reports.php.

Our sustainability strategy comprises 6 focus areas. These are clearly aligned to our focus of creating value, both within our business and in the wider society.

Township®bags Township®bags are made in Khayelitsha by co-operatives. They’re manufactured by Township, a Fairtrade supplier, and generate employment for more than 60 women.

Our sustainability efforts have resulted in significant benefits for the business. We see this process as one of continual learning and improvement.

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