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Sustainability & Corporate Responsibility:

Issues that are likely to have a material impact

on Woolworths over the coming decade

Woolworths

20th

June 2012

Report preparation

Authors: Sarah Adams Kirsten Simpson

Senior Researcher Associate Director

Centre for Social Impact Net Balance

Serena de Kretser Cameron Neil

Senior Associate Senior Associate

Net Balance Net Balance

Samantha Eyre Les Hems

Associate Director of Research

Net Balance Centre for Social Impact

Project Manager: Cameron Neil

Senior Associate

Net Balance

Project Director: Ross Wyatt

Director

Net Balance

Centre for Social Impact and Net Balance Management Group Pty Ltd

Sustainability & Corporate Responsibility: Issues that are likely to have a material impact on

Woolworths over the coming decade.

20th

June 2012

NB Ref: MMPJ11WOO148

Disclaimer:

Net Balance Management Group Pty Ltd (Net Balance) & the Centre for Social Impact (CSI) have prepared this report in

accordance with the usual care and thoroughness of the consulting profession. This report has been prepared for use by

Woolworths, and only those third parties who have been authorised in writing by Net Balance and CSI.

The Report is based on generally accepted practices and standards at the time it was prepared. No other warranty, expressed

or implied, is made as to the professional advice included in this report. It is prepared in accordance with the scope of work

and for the purpose outlined in the project brief. The methodology adopted and sources of information used by Net Balance

and CSI are outlined in this report. Please note that all results have been reported as recorded. Any percentages that do not

add up to exactly one hundred percent are the result of rounding errors.

This report was prepared in May and June 2012, incorporating research conducted in August to November 2010 and January

to May 2012. It is based on the conditions encountered and information reviewed at the time of preparation. Net Balance and

CSI disclaim responsibility for any changes that may have occurred after this time.

This report should be read in full. No responsibility is accepted for use of any part of this report in any other context or for any

other purpose or by third parties. This report does not purport to give legal advice. Legal advice can only be given by qualified

legal practitioners.

Table of Contents

Executive Summary ........................................................................................................ 1

Scope, Aims and Objectives ......................................................................................... 1

Materiality Methodology ............................................................................................. 1

Materiality Findings and Conclusions ........................................................................... 3

Project Aims & Background ............................................................................................ 4

Woolworths’ brief ....................................................................................................... 4

Phase 1 Research: the Centre for Social Impact ........................................................... 5

Phase 2 Research: Net Balance .................................................................................... 6

Peer review: Centre for Social Impact .......................................................................... 6

Detailed Methodology.................................................................................................... 7

Defining materiality ..................................................................................................... 7

Identifying material issues ........................................................................................... 7

Materiality work flow for Woolworths ......................................................................... 9

Limitations to methodology ....................................................................................... 16

Detailed Findings .......................................................................................................... 18

Top issues .................................................................................................................. 18

Prioritisation of issues ............................................................................................... 19

Business impact versus stakeholder concerns ............................................................ 24

Detailed stakeholder findings .................................................................................... 27

Conclusions .................................................................................................................. 29

Appendix A: Broad Material Issues List for Woolworths .............................................. 30

Appendix B: Final Consumer & Staff Surveys ................................................................ 34

Consumer Survey....................................................................................................... 34

Staff Survey ............................................................................................................... 40

Appendix C: Investor Interview Questions ................................................................... 46

Appendix D: CSI Materiality analysis results ................................................................. 47

NB Reference: MMPJ11WOO148 1

Executive Summary

Scope, Aims and Objectives

Woolworths Limited (Woolworths) has sought assistance to define corporate responsibility and

sustainability issues that are potentially material to the retail sector and more specifically to

Woolworths’ core business. The aims of this work were to identify risks and opportunities that may

have a material impact on the business and to better align the business to the principles of

sustainable retailing.

Woolworths engaged the Centre for Social Impact (CSI) to undertake Phase 1 research, leading to a

draft report in November 2010. In December 2011, Woolworths engaged Net Balance Management

Group (Net Balance) to review CSI’s research, seek further stakeholder input and produce a final

report.

Two reports were subsequently prepared for Woolworths with input from both CSI and Net

Balance. One was a high-level report presenting the key findings on sustainability and corporate

responsibility issues most likely to materially impact Woolworths’ business in the coming decade.

The second report outlined the research methodology employed and a more detailed description of

findings. This is the latter report.

Materiality Methodology

Stage 1: Defining Broad Materiality Universe for Woolworths

The first stage in the sustainability materiality process involved identifying a comprehensive list of

material sustainability and corporate responsibility issues relevant to the business. This was

undertaken in accordance with AccountAbility’s ‘five-part materiality test’. Given that CSI had

already conducted a materiality process to develop its draft report, Net Balance used the list of

issues in the CSI draft report and their results table as a starting point. The CSI list of issues was

cross-checked and updated to include additional and more recent sources of information. The

issues were then grouped into common themes.

Stage 2: Further Stakeholder Consultation & Materiality Research

The broad universe of material issues from Stage 1 were used to inform the creation of a consumer

and staff survey, and provided questions for a session with fund managers and investors. In

addition to collecting consumer, staff and investor views on important and priority sustainability

and corporate responsibility issues for Woolworths, additional sources of data were also reviewed.

These included media reports, customer complaints data and a report from the World Economic


Forum1. These 5 major sources of data - (1) the CSI report, (2) consumer survey, (3) staff survey, (4)

investor interviews, and (5) Woolworths internal data, research and external reports – were

brought together to define a final list of potential material issues for Woolworths.

The final list of potential sustainability and corporate responsibility issues material to Woolworths

were identified as:

List of potential material issues for Woolworths

Food affordability Foreign ownership

In-store customer service Market competition & power

Customer satisfaction Concerns on private label

Suppliers behaving ethically Ethical sourcing of products

Responsible marketing Problem gambling

Fair supplier relationships Supporting local manufacturers

Responsible retailing (L&T) Sustainable sourcing

Local community engagement Product quality

Environmentally friendly products Health & nutrition

Supporting local farmers Carbon emissions

Value for money/price Labelling & product information

Safe & fresh food Workplace health & safety

Minimise environmental impact Water supply crises

Reduce food waste Food security

Fair workplace Global financial failure

Job security Impacts of severe weather

Stage 3: Prioritisation of Material Issues

Material issues for Woolworths were analysed using the (i) Scale, Sensor and Sensibilities and (ii)

Ripples of Responsibility frameworks articulated by Meyer & Kirby’s April 2010 Harvard Business

Review article, ‘Leadership in the Age of Transparency’2. Additionally, assessments were made as to

whether Woolworths should take interest, act or own each issue and whether the issue was already

being managed by Woolworths through current business strategies, policies and initiatives.

1 Global Risks 2012: Seventh Edition – World Economic Forum 2 Meyer, C. & Kirby, J. (2010) “Leadership in the Age of Transparency”, Harvard Business Review, April, pp38-46.


Materiality Findings and Conclusions

The priority sustainability and corporate responsibility issues likely to materially impact on

Woolworths’ business in the coming decade are:

1. The responsible use of market power, including support for local farmers and support for local

manufacturers.

2. Delivering affordable safe and fresh food, and assisting consumers to make healthier choices.

3. Ensuring ethical sourcing and ethical suppliers, and communicating these credentials to

consumers via appropriate labelling and product information.

4. Maintaining a healthy, safe and fair workplace.

5. Managing and minimising environmental externalities, particularly carbon emissions.

6. Further addressing problem gambling.

The prioritisation analysis of material issues for Woolworths is summarised in the figure below:

The above fourteen issues scored the highest when applying the Meyer & Kirby Scale, Sensor &

Sensibilities framework (> 20 out of a possible 30). The issues are listed in descending order of their

score. The determination of whether Woolworths owns, can act or should take an interest (though

interest isn’t in the figure above because none of the issues identified fall in to this category) in

these issue is based on the Meyer & Kirby Ripples of Responsibility framework.

Finally, the colour coding reflects whether Woolworths has disclosed management strategies and

actions aimed at addressing these issues. For those issues in green, established management

practices and public performance disclosures are already evident. Orange coded issues have some

publicly disclosed strategies or policies in place to manage the issue, while the one issue in white

was found to have only minimal applicable strategies or policies evident at this time.


Project Aims & Background

Woolworths’ brief

Woolworths Limited (Woolworths) released a brief in August 2010, seeking assistance to define

sustainability and corporate responsibility issues that could be potentially material to the retail

sector and more specifically to Woolworths’ core business. The aim of this brief was to identify risks

and opportunities that may have a material impact on the business and to better align the business

to the principles of sustainable retailing.

This research aims to assist Woolworths to:

� better understand the materiality of key sustainability (social, economic, environmental and

governance) issues relevant to the retail sector and its company

� prioritise these issues and their relative risks and opportunities

� integrate the information in its business decision making

� achieve better integration and alignment of sustainability and corporate responsibility in its

overall business strategy.

The scope set out in the brief called for a materiality assessment at two levels: firstly for the retail

sector (globally and locally) and secondly for Woolworths at a more granular level. The brief from

Woolworths also stated that the project was not about a detailed study of each sustainability issue

and it did not include development of strategies or initiatives to address the issues identified. It did

however include a gap analysis on whether existing Woolworths’ strategies, initiatives and/or

policies are already in place to address the issues identified.

Woolworths owns and operates a group of companies across Australia and New Zealand, some of

which are included in the image below. The scope of the assessment was to address all retail

activities and formats that Woolworths is involved in with the following order of priority:

� Food and grocery retailing

� Liquor retailing

� Gaming (only at company level not at general retail level)

� Petrol

� Consumer electronics

� Discount Department stores


Phase 1 Research: the Centre for Social Impact

The Centre for Social Impact (CSI) is a partnership between the business schools of the University of

New South Wales, the University of Melbourne, Swinburne University of Technology and The

University of Western Australia. Our mission is to create beneficial social impact in Australia

through teaching, research, measurement and the promotion of public debate.

CSI brings together the business, government, philanthropic and social (not-for-profit) sectors, in a

collaborative effort to build community capacity and facilitate social innovation. Our ambition is to

help build an Australia which is renowned for its professionalism and competence in delivering

community benefits and social innovation. CSI brings a sense of urgency to the task of building a

civil society that is open, inclusive and sustainable.

Woolworths initially engaged CSI to undertake this work in September-October 2010. A draft report

was produced in November 2010. CSI used a combination of desktop research and stakeholder

interviews and consultation to define a list of sustainability and corporate responsibility issues

material to retailers generally and Woolworths’ business in particular.

Desktop research examined industry and Woolworths-specific reports and documentation, as well

as the current practices and expectations of competitors and experts on corporate responsibility

and sustainability issues. It incorporated the following data sources:

� 15 Corporate Responsibility Reports from Australian Companies

� 16 Corporate Responsibility Reports from Global Companies

� Methodology from 12 major Corporate Responsibility Rating Agencies

� Media scan of issues raised in the media through two databases: Factiva (all issues in a 1 year

period) and Google News (top 100 grouped issues, and all issues in the year to date based on

keyword searches).

Stakeholder interviews and consultations covered:

� Key internal staff at Woolworths (12 interviews)

� 32 stakeholders from 29 organisations across the following stakeholder groups:

� Major Woolworths suppliers

� Industry groups

� Community organisations

� Government

Following the draft report in November 2010, the scope of the project changed to focus exclusively

on Woolworths’ business rather than that of retail broadly. The second phase of the research

sought to address some of the limitations in the Phase I method, including seeking further

stakeholder input from investors, as well as surveying consumers and staff for their views.


Phase 2 Research: Net Balance

In December 2011, Woolworths engaged Net Balance Management Group (Net Balance) to

progress the work completed by CSI in Phase 1.

Net Balance is one of the largest providers of sustainability advice, assurance, and research in

Australia. It has accomplished this by building a team of more than 50 like-minded, highly qualified

and experienced professionals with a passion to transform organisations from good to great

through sustainable practices. Net Balance specialises in all aspects of sustainability and social

responsibility, with five key focus areas – sustainability strategy and advice, climate change,

environmental services, social and community investment and economics. Net Balance has offices

in Melbourne, Sydney, Brisbane and Hobart.

Net Balance’s brief was to review CSI’s work from Phase 1, and produce a final report on what

sustainability and corporate responsibility issues are likely to materially impact Woolworths’

business in the coming decade.

Net Balance subsequently prepared two reports for Woolworths, with input from CSI, to address

the brief:

� a high-level report presentation of the key findings, and

� a detailed report outlining the methodology employed to identify and prioritise the material

issues and a more detailed description of findings

This is the latter report.

Peer review: Centre for Social Impact

The final step in the Materiality Analysis was a peer review of the methodology as outlined in this

report, to provide an independent and informed perspective on the approach taken.

CSI reviewed the contents of this methodology report and accompanying presentation only. The

focus of CSI was on the methodology employed and disclosed in this report as prepared by Net

Balance. The purpose of this review was to provide Net Balance and Woolworths with independent

feedback on their approach to materiality as outlined in this report. This feedback has been

incorporated into this final report. The scope of CSI’s study does not provide assurance over the

data collection process, the data used in the study, nor the final results around prioritisation.

CSI found that, subject to the limitations disclosed in the “Limitations to methodology” section

(p16), the approach and methodology for identifying and prioritising key sustainability and

corporate responsibility issues for Woolworths Limited as outlined in this report, is reasonable and

fair and in accordance with current approaches to materiality review.


Detailed Methodology

Defining materiality

The concept of materiality goes beyond financial impact alone. It also encompasses an

organisation’s significant economic, environmental, and social issues. These material issues tend to

spark stakeholder interest and concern. They may also be defined as risks or opportunities for the

organisation.

Organisations are faced with a wide range of issues on which they can choose to manage or take

action on. Materiality can be described as the threshold at which issues become sufficiently

important to measure and manage. Not all issues will be of equal importance and the effort a

company puts into management of an issue should reflect the relative priority and materiality of

any given issue.

In a financial sense, materiality is commonly thought of as a threshold for influencing the economic

decisions of those using an organisation’s financial statements, investors in particular. Materiality in

terms of sustainability and corporate responsibility is much more complicated as it is concerned

with a wider range of impacts and stakeholders. Some of which are much harder to measure,

manage and communicate.

At present there is often no clear threshold of legal, financial or reputational liability for many

sustainability and corporate responsibility issues below which businesses can safely say ‘that is not

our problem’. Emerging issues may be contested and difficult to measure, but they can be early

signs of growing risk or opportunity. Assessment of material sustainability and corporate

responsibility issues can provide the basis for stakeholders and management to make sound

judgements about the things that matter to them. It can also assist with taking actions that

positively influence the organisation’s performance.

Identifying material issues

Combinations of internal and external factors are generally used to determine which sustainability

and corporate responsibility issues are material to an organisation. These include factors such as

the organisation’s overall mission and competitive strategy, internal policies, concerns expressed

directly by stakeholders, broader social expectations, and the organisation’s influence over

upstream (i.e. supply chain) and downstream (i.e. customers) impacts.

A range of established methodologies can be used to identify and prioritise material issues. Net

Balance uses AccountAbility3’s five-part test in order to identify the universe of material issues. This

3 AccountAbility is a leading global organisation providing solutions to challenges in corporate responsibility and sustainable

development. As part of this work, AccountAbility designs and maintains standards in stakeholder engagement & reporting assurance.


methodology was also used by CSI in preparing their draft report. AccountAbility’s ‘five-part

materiality test’ calls on businesses to identify issues that are relevant to direct short-term financial

performance, the business’s ability to deliver on its strategy and policies, best practice norms

exhibited by peers, stakeholder behaviour and concerns and societal norms particularly where

linked to possible future regulation. These key aspects are outlined in Figure 1 below, along with

the tasks typically undertaken to assess of the aspects. Given the work already completed by CSI,

and the scope of the engagement of Net Balance by Woolworths, Net Balance didn’t repeat these

tasks.

Figure 1: AccountAbility’s five part materiality assessment

As a final point, it is important to note that materiality issues are complex, interrelated and

constantly changing in nature and scale. This report has been prepared within the framework

outlined above, and in Appendix A, including the classifications by Issue and Sub-Issue. While

categorising the universe of issues differently may have led to different conclusions, this is an

aspect common to all materiality assessment processes.


Materiality work flow for Woolworths

The materiality methodology applied by Net Balance for addressing Woolworths’ brief consisted of

three key stages, as shown in Figure 2 and described in further detail below. It builds on the work

detailed in CSI’s draft report. Their results were key inputs through all stages of the materiality

assessment and analysis process.

Figure 2: Flow of Materiality Work, Data Sources, & Prioritisation for the Project


Stage 1: Defining Broad Materiality Universe for Woolworths

The first stage in the materiality process involved identifying a comprehensive list of material

sustainability issues relevant to the business, in accordance with AccountAbility’s ‘five-part

materiality test’. Given that CSI had already conducted a materiality process to develop its draft

report, Net Balance used the list of issues in the CSI draft report and their results table as a starting

point.

The CSI list of material issues was cross-checked and updated to include additional and more recent

sources of information, including:

� Additional internal research provided by Woolworths.

� Global retail trends reports.

� Woolworths’ own sustainability reports and related strategies.

� A brief, high-level media scan of major issues in retail globally and locally, including drawing on

existing Net Balance knowledge and practise in this domain.

The issues were then grouped into common themes. The final broad materiality universe for

Woolworths from January 2012 is included as Appendix A.

Stage 2: Further Stakeholder Consultation & Materiality Research

The broad universe of material issues from Stage 1 were used to inform the creation of a consumer

and staff survey, as well as a set of questions for an engagement session with fund managers and

investors. The final surveys for consumers and staff are included as Appendix B. The questions for

investors are included as Appendix C.

In addition to collecting consumer, staff and investor views on important and priority sustainability

and corporate responsibility issues for Woolworths, additional sources of data, such as media

reports, customer complaints data and a report published by the World Economic Forum4 were also

reviewed.

These 5 major sources of data – (1) the CSI report, (2) consumer survey, (3) staff survey, (4) investor

interviews, and (5) Woolworths internal data, further research and external reports – were brought

together to define a final list of potential material issues for Woolworths (Table 1).

4 Global Risks 2012: Seventh Edition – World Economic Forum


Table 1: List of potential material issues for Woolworths

Material Issue Explanation

Food affordability Keeping food affordable, food price, cost of living

In-store customer service Concern about automisation of check outs, wanting to see staff in store, service

experience

Customer satisfaction Ensuring customer satisfaction

Suppliers behaving ethically Suppliers respecting human rights and labour rights in their own operations

Responsible marketing Engages in responsible marketing practices, e.g. honesty, ads for kids

Fair supplier relationships Working with suppliers in a fair and ethical way, terms, on-time payment,

transparency, no corruption

Responsible retailing (L&T) Behaves responsibly in retailing liquor and tobacco

Local community engagement Engaging and investing in local communities

Environmentally friendly products Offers customers a good choice of environmentally friendly products

Supporting local farmers Supporting local farmers in supply relationships, preferences

Value for money/price Broader affordability and price, not just food (encompasses broader product

offering from Woolworths group)

Safe & fresh food Providing safe and fresh food

Minimise environmental impact Minimises the environmental impact of its own operations (e.g. waste, water,

energy)

Reduce food waste Management and reduction of food waste in stores

Fair workplace Providing a workplace that treats employees fairly and ethically

Job security Feelings of job security for staff

Foreign ownership Concerns to keep Woolworths Australian owned

Market competition & power Concerns over too much supermarket power over supply chains, to the

detriment of local farmers, manufacturers, and suppliers

Concerns on private label Concerns 2 aspects: private label reducing choice, removing favourite brands +

lack of transparency on private label and pricing policy is squeezing local

manufacturers and farmers

Ethical sourcing of products For both private label and suppliers, sourcing of ingredients and manufacturing

up the supply chain ensures ethical outcomes

Problem gambling Management of problem gambling

Supporting local manufacturers Supporting local manufactures in supply relationships, preferences; particularly

related to food

Sustainable sourcing For both private label and suppliers, sourcing of ingredients and manufacturing

up the supply chain manages environmental outcomes, e.g. animal welfare,

seafood, palm oil

Product quality Ensuring quality products (broader than just food)


Table 1: List of potential material issues for Woolworths

Material Issue Explanation

Health & nutrition Ensuring nutritious and healthy food and product options, helping consumers

make healthy choices

Carbon emissions Management and reduction of carbon emissions through own operations and

supply chain

Labelling & product information Using product labelling to communicate information to customers on health,

nutrition, sustainability, ethics, environmental choices, etc.

Workplace health & safety Ensuring staff have a safe and healthy work environment

Water supply crises Local and global concerns over potable water and water for agriculture

Food security Global and local concerns over food security, short-term food shortages, food

deserts, hunger, etc.

Global financial failure Economic uncertainty over a second global financial collapse, which may be

worse and more prolonged, EU fears

Impacts of severe weather Disruption to primarily local, but also global, supply chains due to severe and

extreme weather events, associated with climate change

Table 2 provides information on the 5 sources of data used to derive this final list of material issues.

Following the work completed at stage 2 by Net Balance, and the work previously completed by

CSI, this list of issues incorporates stakeholder consultations with:

� Woolworths staff (both survey (Net Balance) and interviews (CSI)).

� Major Woolworths suppliers (CSI).

� Community organisations (CSI).

� Industry groups (CSI).

� Government (CSI).

� Consumers (Net Balance).

� Investors (Net Balance).


Table 2. Sources of data for materiality assessment

Sources Description Additional Information

CSI Report Review of CSI report, methodology, material issues, results, stakeholder list

Represents significant desktop research in to retail sustainability

issues, stakeholder consultation with suppliers, government,

industry and community organisations

Consumer survey Consumer survey sent out by Woolworths to Australians 1379 responses

Staff survey Staff survey link to a SurveyMonkey questionnaire sent out by Woolworths

to staff across Australia and New Zealand 1406 responses

Investor interviews Workshop with investors to discuss material sustainability risks and

opportunities for Woolworths

Participants included AMP Capital Investors; Australian Super;

Colonial First State Investments; Future Fund Management

Agency; Goldman Sachs Asset Management Australia; Industry

Funds Management; JCP Investment Partners; Local Government

Superannuation Scheme; Maple Brown Abbot; Northward Capital;

Solaris Investment Management; Citigroup

Woolworths internal data, further

research and external report

Consumer insights - reviewed a number of reports provided by Woolworths

on specific issues important to consumers

Media review - review of 6 months of media clippings mentioning

Woolworths

Consumers complaints data - Analysed types of complaints received by

Woolworths businesses

Banarra fresh food suppliers report – prepared for Woolworths based on

consultation with a dozen fresh food suppliers

World Economic Forum Report - Global Risks 2012 Seventh Edition

Media clippings were from August 2011 to January 2012

Customer complaints data covered October to December 2012

Banarra supplier report was from November 2011


Stage 3: Prioritisation of Material Issues

Material issues for Woolworths were evaluated using the Scale, Sensor and Sensibilities and Ripples

of Responsibility frameworks, articulated by Meyer and Kirby in the April 2010 Harvard Business

Review5.

The Scale, Sensor, Sensibility framework was broken down into key sections with a number of sub-

categories and each issue was scored against defined criteria for each sub-category (see Table 3).

Based on this analysis, each issue was assigned a priority score ranging from 1-30 (30 being highest

priority) and the issues were ranked from highest to lowest priority.

Staff survey data was used to inform assessments of important to internal stakeholders, i.e. those

issues that staff deemed most important scored highest in this section. Similarly customer survey

data, investor session discussions, and research with Woolworths suppliers were used to inform

assessments of importance to external stakeholders, and media reviews informed other aspects of

Sensibility.

Table 3. The Scale, Sensor and Sensibility framework

Analysis conducted

Scale The extent of financial impact the issue could bring to bear on Woolworths

The potential for legal action and the likely consequence of any action

Potential reputation risk and extent of impact

Sensor Whether voluntary standards are in place and how established they are

Whether any regulatory controls exist or are likely to be established in the medium term (5 years)

The availability of data and measurement criteria

Sensibility Importance to internal stakeholders (staff). Issues were scored based on importance to staff.

Importance to external stakeholders (consumers, investors, suppliers)

Importance to the public and wider society

Whether any NGO or campaign activity has been conducted around the issue and the extent to this

activity

The Ripples of Responsibility framework (Table 4) was used to assess how each issue relates to

Woolworths’ capacity for action and operational boundaries. The categorisation was informed by

desktop review, pre-existing knowledge of the supermarket retail sector and value chains of Net

Balance staff, and internal workshops involving staff across the Net Balance firm.

5 Meyer, C. & Kirby, J. (2010) “Leadership in the Age of Transparency”, Harvard Business Review, April, pp38-46.


Table 4. Ripples of Responsibility framework

Woolworths owns the issue and it is a direct result of their operations Take ownership

Woolworths is not directly responsible for the issue but is able to influence positive

change

Take action

The issue is outside the sphere of influence of Woolworths, but has the potential to

impact the company in future

Take interest

Our final step in the prioritisation process was an assessment of Woolworth’s current ‘management

approach’ to each issue (based on publicly available information; Table 5). In determining

Disclosures of Management Approach we looked for evidence of the following on the Woolworths

website, Annual Report, Sustainability Report and Sustainability Strategy:

� strategy and policy

� risk management and oversight

� actions already being undertaken, and

� current measurement and reporting.

Table 5. Disclosure of Management Approach assessment (based on assessment on the criteria above)

The organisation has publicly disclosed policies, procedures and management systems

in place. Performance is measured and reported against goals and targets

Established

The organisation appears to be making efforts to manage the issue, based on publicly

available information. For example, there may be policy guidance however

measurement and reporting is in its infancy and no targets have been set

Moderate

The organisation has minimal disclosure in relation to management of the issue. No

clear policy or procedure guidance is disclosed and there is no evidence of performance

measurement

Minimal disclosure

It is important to note that having an established management approach does not mean that a

business has achieved all the objectives or desired results of this management approach at any

given point in time. Rather it reflects that business has a high degree of understanding of the issue

and is actively engaged in addressing or managing the issue and its impacts. Residual risk may still

apply to certain issues (i.e. impacts of gaming). Residual risk applies where no level of

management can mitigate all risk.

Overall, the stage 3 assessment allowed us to evaluate which issues have the highest priority in

terms of both impact to Woolworths and its key stakeholders. Additionally it also allowed us to

determine which issues Woolworths is already actively managing and disclosing its actions and

where it could increase its efforts.

Finally, our results were workshopped amongst the project team members and sense checked

against the Phase 1 research conducted by CSI.


Limitations to methodology

Limits on scope

The materiality research was conducted over two periods, with a significant time lag between each.

� CSI conducted their stakeholder engagement and desktop research from August to October

2010 (Phase 1)

o This included the review of peer reports, the ‘specialist perspectives’, current standards at

that time, interviews with suppliers, interviews with community organisations, interviews

with industry groups and also a review of current and expected regulation and standards in

that context

o Each of these sources can reasonably be expected to have changed somewhat over the

passage of time between Phase 1 and Phase 2

� Net Balance conducted their stakeholder consultation and materiality research from January to

May 2012 (Phase 2)

o It was outside the scope of Phase 2 to review and redo the work already completed by CSI

in Phase 1, and Net Balance did rely on CSI’s work to inform it’s consultation and research

o However, Net Balance did ameliorate some of these concerns by conducting additional,

current stakeholder consultations, as well as reviewing more recent reports, media data,

and applying its expertise in the area of sustainability in retail

Finally, this report, and the research upon which it is based, can only provide a snapshot of material

issues in the context of the ‘coming decade’ for Woolworths. Given the dynamic environment in

which retail operates and the current state of global affairs, it is likely that the issues documented

here will change in importance and new ones will arise. Woolworths’ ongoing stakeholder

engagement and reporting processes should enable it to effectively navigate any changes that do

occur.

Limits on representativeness, independence, and sample bias

Both Net Balance and CSI made efforts to capture a wide variety of opinions from the stakeholders;

however these samples are not necessarily representative of these stakeholder groups.

The customer survey was administered online via Woolworths’ existing consumer insights panel,

rather than by Net Balance independently. While a survey from Woolworths may skew responses

compared to one conducted by Net Balance, it was outside the scope of the engagement for Net

Balance to access a consumer survey sample of the size available through Woolworths’ existing

arrangements. Additionally, while the response rate was good (1379 people completed it), it is a

self-selecting group motivated to answer such surveys. No screening or norming of data to the

general population was carried out. Woolworths provided unanalysed, unfiltered data to Net

Balance to analyse and assess consumer views.


For the staff survey, Woolworths’ provided a link to an online survey, established by Net Balance

(via SurveyMonkey), to its entire staff across both Australia and New Zealand. While Net Balance

created the survey and received the results directly, there was nothing in the survey delivery that

indicated it was an independent data collection process, which may have skewed results. Again,

while there was a good response rate (1406 staff completed the survey), it was a self-selecting

group and no efforts were made to normalise this data across the Woolworths staff profile.

The investor session was opt in and wasn’t checked or normed in any way for the current

Woolworths investor profile, or compared to the sector profile. Some attendees were current

investors and others did not have any funds invested in Woolworths. It is likely investors with

particular interests in sustainability and corporate responsibility aspects of Woolworths’

performance were most motivated and likely to attend.


Detailed Findings

Top issues

The priority sustainability and corporate responsibility issues likely to materially impact on

Woolworths’ business in the coming decade are:

1. The responsible use of market power, including support for local farmers and support for local

manufacturers

2. Delivering affordable safe and fresh food, and assisting consumers to make healthier choices


consumers via appropriate labelling and product information

4. Maintaining a healthy, safe and fair workplace

5. Managing and minimising environmental externalities, particularly carbon emissions

6. Further addressing problem gambling

The prioritisation analysis of material issues for Woolworths is summarised in Figure 3 below:

Figure 3: Top issues for Woolworths on Scale, Sensor, Sensibilities Framework

These fourteen issues scored the highest when applying the Meyer & Kirby Scale, Sensor &

Sensibilities framework (> 20 out of a possible 30). The issues are listed in descending order of their

score. The determination of whether Woolworths owns, can act or should take an interest (though

interest isn’t in the figure above because none of the issues identified fall in to this category) in

these issue is based on the Meyer & Kirby Ripples of Responsibility framework.


Finally, the colour coding reflects our assessment of whether Woolworth appears to have strategies

and policies in place to manage and address these issues. For issues in green, established

management practices and public performance disclosures are already evident. Orange coded

issues have some strategies or policies to manage the issue disclosed, while the issues in white

have minimal public disclosure of management at this time. The assessment is based on publicly

available disclosure only. It may be that Woolworths is aware of and addressing the issue but that

no disclosure of action is provided in the public sphere.

Prioritisation of issues

All 32 issues in the final material issues list for Woolworths were analysed using the Sense, Sensor,

Sensibilities and Ripples of Responsibility frameworks. A gap analysis on current Woolworths’

management approach was also completed for each issue. The analysis is summarised in Table 6,

below:

Table 6. Assessment of Woolworths material issues against the three prioritisation frameworks

OWN ACT INTEREST MANAGEMENT

Fair workplace

Carbon emissions

Market competition & power

Workplace health & safety

Supporting local farmers

Problem gambling

Suppliers behaving ethically

Safe & fresh food

Ethical sourcing of products

Responsible marketing

Labelling & product information

Supporting local manufacturers

Minimise environmental impact

Health & nutrition

Food affordability

Responsible retailing (L&T)

Value for money/price

Job security

Global financial failure


Table 6. Assessment of Woolworths material issues against the three prioritisation frameworks

OWN ACT INTEREST MANAGEMENT

Product quality

Water supply crises

Customer satisfaction

Concerns on private label

Sustainable sourcing

Local community engagement

Impacts of severe weather

Reduce food waste

Fair supplier relationships

In-store customer service

Environmentally friendly products

Foreign ownership

Food security

The most material issues listed in the table above can generally be described as social and

environmental issues, apart from ‘market competition & power’. It is particularly evident that

Woolworths is exposed to a number of social issues and that stakeholders expect the company has

a good deal of ability to act.

Scale, Sensor, Sensibilities

The combined Scale, Sensor, Sensibilities scores for each issue are graphed in Figure 4. Beyond the

top issues already communicated (scores > 20 out of 30), the next tier of issues (all scoring 20),

generally relate to economic issues – except for responsible retailing of liquor and tobacco. Food

affordability, value for money & price, job security, and global financial failure were on the cusp for

inclusion in the top issues.

Current management engagement

with the issue

Esta bl ished

Modera te

Minima l dis clos ure


Figure 4: Scale, Sensor, Sensibilities Scores for Material Issues


Ripples of Responsibility

The categorisation of material issues for Woolworths using the Ripples of Responsibility framework

is outlined in Figure 5. As is the case with most large retailers, there are very few issues material to

Woolworths that are not within their scope to influence – only three issues were deemed to fall in

to the ‘Take Interest’ category. These issues are considered global and beyond Woolworths’

control. As such a watching brief on their progress and impact on the business should be

undertaken.

Figure 5: Ripples of Responsibility categorisation of material issues


Management Approach

The analysis of Woolworths’ existing strategies and policies to determine which material issues are

already being managed was the final prioritisation framework applied. The assessment of which

issues have established management systems, moderate or minimal is below in Table 7.

Table 7. To what extent do current disclosures of Woolworths’ strategies & policies indicate they are

managing the material issues?

Established Management Moderate Management Minimal Disclosures

Fair workplace* Supporting local farmers* Market competition & power*

Carbon emissions* Suppliers behaving ethically* Global financial failure

Workplace health & safety* Responsible marketing* Water supply crises

Problem gambling* Labelling & product information* Impacts of severe weather

Safe & fresh food* Supporting local manufacturers* Foreign ownership

Ethical sourcing of products* Health & nutrition* Food security

Minimise environmental impact* Food affordability

Job security Responsible retailing (liquor &

tobacco)

Product quality Value for money/price

Concerns on private label Customer satisfaction

Sustainable sourcing Fair supplier relationships

Local community engagement In-store customer service

Reduce food waste Environmentally friendly products

* = Top issues identified

Table 7 shows that Woolworths has publicly disclosed management systems already in place, or

developing, for most material issues. Three of those categorised as minimal fall outside the capacity

of a retailer to manage, e.g. water supply crises. One of the top issues does currently have minimal

disclosure of a pre-existing management approach, Market Competition and Power.


Business impact versus stakeholder concerns

A typical materiality assessment compares business impact against the concerns of stakeholders.

This type of analysis recognises that stakeholders are concerned with a much broader range of

issues than those which will have a financial impact in the short to medium term. The analysis also

indicates that stakeholders believe that companies must act to improve not only their bottom line,

but that they should also contribute to the communities they operate in and take responsibility as a

global citizen.

In the Scale, Sensor, Sensibilities framework:

� Scale is a metric for the impact of financial, legal/compliance and reputational risk, or business

impact

� Sensibilities is a metric for the extent of public opinion on the issue, i.e. internal and external

stakeholder feedback, media and NGO reporting

The two figures below (6 and 7) graphically represent the mapping of business impact to the

concerns of stakeholders, firstly at an overall level (Figure 6), then focusing in on the high business

impact and high stakeholder concern quadrant (Figure 7). In Figure 7, the colouring of the items

(green, orange and blue) is used to signify the assessment of Woolworths’ public disclosures on

current management approach: established, moderate or minimal.


Figure 6: Scale/Business Impact vs. Sensibilities/Stakeholder Concern


Management

Minimal Disclosure

Moderate

Established


Detailed stakeholder findings

The prioritisation analysis of the material issues, and the initial defining of the final material issues

list subjected to the prioritisation, was informed by the stakeholder data collected. As described in

the methodology above, this included a staff survey, a consumer survey, and a session with fund

managers and investors. High-level findings of these stakeholder sources are outlined below.

Consumer Survey


Staff Survey

Investor Sessions


Conclusions

This report for Woolworths has assessed and prioritised corporate responsibility and sustainability

issues that are potentially material to Woolworths’ core business over the coming decade.

The report brings together the materiality work of the Centre for Social Impact, completed in

November 2010, with further research, stakeholder consultation and analysis undertaken by Net

Balance between January and May 2012.

Taken together, Net Balance and CSI’s materiality assessment has incorporated stakeholder

consultations with staff, suppliers, community organisations, industry groups, government,

consumers and investors.

Overall, five sources of data – (1) the CSI report, (2) consumer survey, (3) staff survey, (4) investor

interviews, and (5) Woolworths internal data, further research and external reports – were brought

together to define a final list of 32 potential material issues for Woolworths.

The list of 32 potential material issues were analysed and prioritised using three tools: (1) a Scale,

Sensor, Sensibility framework; (2) a Ripples of Responsibility framework (both articulated by Meyer

and Kirby in the April 2010 Harvard Business Review article, ‘Leadership in the Age of

Transparency)6; and (3) current disclosures on management approach.

From this prioritisation process, the following issues were determined to be the top sustainability

and corporate responsibility issues likely to have a material impact on Woolworths over the coming

decade:

1. The responsible use of market power, including support for local farmers and support for

local manufacturers

2. Delivering affordable safe and fresh food, and assisting consumers to make healthier

choices


consumers via appropriate labelling and product information

4. Maintaining a healthy, safe and fair workplace

5. Managing and minimising environmental externalities, particularly carbon emissions

6. Further addressing problem gambling

6 Meyer, C. & Kirby, J. (2010) “Leadership in the Age of Transparency”, Harvard Business Review, April, pp38-46.


Appendix A: Broad Material Issues List for Woolworths

The first stage in the sustainability materiality process involved identifying a comprehensive list of

material sustainability issues relevant to the business. AccountAbility’s ‘five-part materiality test’.

Given that CSI had already conducted a materiality process to develop its draft report, Net Balance

used the list of issues in the CSI draft report and their results table as a starting point. To ensure

completeness, the material issues defined by CSI in November 2010 were cross-checked and

updated to include additional internal research provided by Woolworths, global retail trends

reports, Woolworths’ own sustainability reports and related strategies, and a scan of major issues

in retail globally and locally. The issues were then grouped into common themes.

The final list of issues potentially material to Woolworths that Net Balance arrived at is listed in

Table A.1.

Table A.1. Broad Materiality Universe for Woolworths, January 2012

Issues Sub-issues

Staff and the workplace

Diversity, anti-discrimination and

accessibility

Workplace diversity*

Anti-discrimination*

Indigenous employment

Access to information and assistance

Human rights

Training and Development Training and development

Local hire/targeted skills building initiatives

Leadership initiatives*

Reward and recognition

Workplace Culture Staff engagement*

Communication

Collaboration

Volunteering and workplace giving*

Workplace Relations Fair working conditions

Freedom of association*

OHS

Workplace safety*

Health and wellbeing*

Emergency and crisis management



Issues Sub-issues

Pricing and competition

Pricing Ethical pricing strategies *

Food affordability

Competition Regulations

Bribery and corruption*

Market power leveraging

Product responsibility

Tobacco* Health impact on consumers

Consumer education

Gaming* Problem gambling

Consumer education

Liquor* Problem drinking

Anti-social behaviour

Consumer education

Responsible retailing*

Food safety Collaboration with suppliers

Safe food handling

Food labelling (allergens etc.)

Consumer education

Informed consumer choice

Product selection Affordable and healthy food options*

Portion size

Consumer education*

Product labelling Nutritional information

Certifications e.g. Fairtrade, free-range etc.*

Responsible advertising*

Consumer education

Supply chain

Supplier engagement Fair and ethical business practices*

Collaboration initiatives*

Supply chain standards Labour practices

Environmental management*



Issues Sub-issues

Palm oil

Fish and seafood

Timber, pulp and paper

Animal welfare*

Sourcing and traceability Certifications e.g. Fairtrade, Carbon Neutral

Supply chain ethical auditing

Food security

Water Water availability*

Water management*

Climate change adaptation Increase in commodity prices

Reduction in supply due to natural disaster

Scarcity of food

Sustainable agriculture Organic farming methods*

Reduction of chemical and pesticide use

Product supply e.g. GMO free, Palm oil*

Barriers to trade Reduction in supply due to political unrest

Food import protection

Energy and climate change

Energy efficiency In-store energy use*

Office energy use*

Energy sources

Greenhouse gas emissions Regulations and tax

Carbon emissions*

Refrigerants*

Supplier engagement*

Transport Fleet*

Logistics planning

Supplier engagement

Climate change adaptation Insurance risk

New infrastructure planning

Environmentally sustainable design

Extreme weather events



Issues Sub-issues

Environment Regulatory Compliance

Biodiversity

Waste

Landfill Office waste/paper use

In-store waste

e-waste*

Food waste Reducing in-store food waste*

Food donations

Consumer education *

Recycling Office recycling

In-store recycling

Supply chain waste Supplier waste reduction partnerships *

Packaging

Responsible Packaging Reduction in packaging*

Plastic bags*

Consumer education*

Community engagement

Local community engagement Local community donations and in-kind support*

Local community education

Emergency aid following disasters

Customer service in-store Reputation

Product re-calls

Complaints resolution

Rural and regional accessibility Engagement upon entering/exiting communities*

Impacts on local trade/economy/communities

* Items marked with a (*) are directly related to items in the CSI list


Appendix B: Final Consumer & Staff Surveys

Consumer Survey

This is a survey about the big issues for the retail sector, with specific focus on Woolworths Limited

over the next 5-10 years. The remainder of this survey will specifically ask questions about

Woolworths Limited which includes all the retail brands that fall under this brand. This includes all

the following retail stores which you may be familiar with.

1. Which of the following grocery stores do you occasionally or regularly shop at?

Woolworths / Safeway (VIC ONLY) 1

Coles 2

Franklins 3

IGA/Foodland 4

Aldi 5

None of the above 6

2. In order of priority, what would be your top three concerns (if any) about Woolworths Limited

now and in the future? IF YOU CAN’T THINK OF ANY, PLEASE TYPE IN NONE.

1.

2.

3.

3. Below is a list of issues that may concern a major Australian retailer likes Woolworths Limited.

We are interested in getting your opinion on each of these issues. Please rate each issue in

terms of how important it is to you where 1 is extremely unimportant to you and 7 is extremely

important to you in relation to Woolworths Limited.

Extremely

unimportant

1 2 3 4 5 6

Extremely

important

7

Value for money

Competitive pricing

Safe products

Fair relationships with suppliers

Environmental impacts of Woolworths

activities (e.g. energy and water use)

Source products in an ethical way

Being a responsible corporate citizen


Extremely

unimportant

1 2 3 4 5 6

Extremely

important

7

Engaging in responsible marketing

practices, e.g. honesty, ads for kids

Ensuring suppliers do the right thing

Climate change

Supporting local communities

Treating employees fairly

Ensuring customer satisfaction

Supporting consumer health and

nutrition

Considers how a product impacts on

the planet in its business decisions

Sourcing products from Australia

rather than overseas

Offering high quality products

Ensures access to affordable food in

the future

Food waste

Offering consumers a choice of

environmentally friendly and ethical

products

Responsible retailing of liquor and

tobacco

4. As a large Australian retailer, there are many things Woolworths Limited may have

responsibility for. Please tell us if you agree or disagree that Woolworths should be responsible

for the following issues:

Strongly

disagree

Somewhat

disagree

Neither

agree /

disagree

Somewhat

agree

Strongly

agree

Supporting local Australian farmers

Providing consumers with information on

health and nutrition

Providing affordable healthy food

Reducing product packaging


the impacts of liquor


Strongly

disagree

Somewhat

disagree

Neither

agree /

disagree

Somewhat

agree

Strongly

agree

Ensuring suppliers they work with respect

human and labour rights in all markets they

function in

Responsible marketing & retailing of liquor

Providing information to consumers on how

to recycle and reduce waste

Reducing food waste in stores

Offering customers a choice of fair trade

products

Designing stores that use less energy and

water

Providing in-store recycling for consumer

goods

Providing safe fresh food

Engaging with and investing in local

communities

Resolving complaints and customer enquiries

Offering programs to train underprivileged

members of the community

Considering impacts of new stores on local

business

Ensuring access to affordable food in the

future (i.e. next 10-20 years)

Offering customers a good choice of

environmentally friendly products


Providing a workplace that treats employees

fairly and ethically

Working with suppliers in a fair and ethical

way

Reducing environmental impact when

transporting goods


animal welfare

Labelling products that communicate

environmental and/or ethical qualities


Strongly

disagree

Somewhat

disagree

Neither

agree /

disagree

Somewhat

agree

Strongly

agree

Providing affordable products

Working with farmers to improve impacts on

the environment

Truthful advertising

5. While Woolworths Limited would like to address all the issues that are important to the wider

community, like any large company, resources are always limited. We therefore would like to

get you opinion on the areas that you think Woolworths Limited should prioritise to invest its

time and money addressing? So from the list below, please select the top 5 most important

issues that you believe Woolworths Limited should focus on addressing?

Most

important

Second most

important

Third most

important

Fourth most

important

Fifth most

important

(Based on respondent’s selection)




DEMOGRAPHICS

6. In which age group do you fall in?

Under 18 1

18-24 2

25-29 3

30 to 34 4

35 to 39 5

40 to 44 6

45 to 49 7

50 to 54 6

55 to 59 9

60 to 65 10

66 and older 11

7. Are you?

Male 1

Female 2


8. Which of the following best describes your current family situation?

Living with partner only

Living with children only

Living with partner and children

Living alone

Sharing accommodation

Living with parents or guardian

Other

9. How many children under 18 do you have living in your household?

10. Where do you live?

NSW (INC ACT) 1

VIC 2

QLD 3

WA 5

SA 6

NT 7

Tasmania 8

11. What is your postcode?

And finally, just a little about where you shop.

12. Which of the following is the store you mainly shop at?

Woolworths / Safeway (VIC ONLY) 1

Coles 2

Franklins 3

IGA/Foodland 4

Aldi 5

None of the above 6


Staff Survey

[Delivered by SurveyMonkey]

Woolworths is represented in almost every community in Australia and New Zealand. In many

towns, we are often the largest local employer, as well as the place where residents shop for

their food and everyday needs. As a member of those communities we understand that we have

a duty to be more than just a retail outlet, but to also make a positive impact on the societies

that we serve. We work to the principle that we can never take our customers for granted – we

need to earn their trust and respect and this means acting responsibly both inside and outside

our stores. Our aim is to have a responsible and sustainable business today and long into the

future.

This is a survey about the big issues for the retail sector over the next 5-10 years, with specific

focus on Woolworths Limited.

All information provided in this survey is confidential. The survey responses will not identify any

individual that takes part.

1. As an employee, what are your top three concerns about the future of Woolworths? (List

them in order of priority)

1.

2.

3.

2. Below is a list of issues for Woolworths as a major retailer. Rate each item on how important

these issues are to you.

Extremely

unimportant

Unimport

ant

Quite

important

Fourth

most

important

Extremely

important

Reduces food waste

Considers how a product impacts on

the planet in its business decisions

Ensures access to affordable food in

the future

Behaves responsibly in its retailing of

liquor and tobacco

Treats employees fairly

Offers consumers a choice of

environmentally friendly and ethical

products


Extremely

unimportant

Unimport

ant

Quite

important

Fourth

most

important

Extremely

important

Supports consumer health and

nutrition

Sources products domestically rather

than overseas

Offers high quality products to

customers

Ensures customer satisfaction

3. Below is a list of issues for Woolworths as a major retailer. Rate each item on how important

these issues are to you.

Extremely

unimportant

Unimport

ant

Quite

important

Fourth

most

important

Extremely

important

Ensures safe products

Ensures suppliers do the right thing

Offers value for money to customers

Engages in responsible marketing

practices, e.g. honesty, ads for kids

Treats employees fairly

Sources products in an ethical way

Builds fair relationships with suppliers

Is a responsible corporate citizen

Considers climate change issues in its

business decisions

Offers competitive pricing

Minimises the environmental impacts

of its activities (e.g. energy and water

use)

Supports local communities


4. As a large retailer, there are many things Woolworths Limited may or may not have

responsibility for. Please tell us if you agree or disagree that Woolworths Limited should be

responsible for the following issues.

Strongly

disagree Disagree Not sure Agree Strongly agree

Offering customers a good choice of

environmentally friendly products

Offering programs to train underprivileged

members of the community

Providing a workplace that treats

employees fairly and ethically

Resolving complaints and customer

enquiries


Truthful advertising

Labelling products that have

environmental or ethical benefits (e.g.

products that are certified as sustainable,

fair trade, organic or free range)

Considering impacts of new stores of local

business

Working with farmers to improve impacts

on the environment

Ensuring suppliers they respect animal

welfare

Working with suppliers in a fair and ethical

way

Reducing environmental impact when

transporting goods

Providing affordable products

Ensuring access to affordable food in the

future (i.e. next 10 – 20 years)


5. As a large retailer, there are many things Woolworths Limited may or may not have

responsibility for. Please tell us if you agree or disagree that Woolworths Limited should be

responsible for the following issues.

Strongly

disagree Disagree Not sure Agree Strongly agree

Designing stores that use less energy and

water

Providing affordable healthy food

Engaging with and investing in local

communities


human and labour rights in all markets

that they function in

Providing safe fresh food

Supporting local farmers

Offering customers a choice of far trade

products

Responsible marketing and retailing of

liquor

Providing in-store recycling for consumer

goods

Reducing food waste in stores


health and nutrition


impacts of liquor

Providing information to consumers on

how to recycle and reduce waste

Reducing product packaging

6. While Woolworths Limited would like to address all the issues that are important to the

wider community, like any large company, we must choose where to invest time and money.

From this list of issues, which 5 are most important for Woolworths to invest its time and

money? Choose 5 from the following:

� Growth in private label offering

� Availability of affordable products

� Management of water use

� Providing safe and fresh food


� Labelling products that have environmental or ethical benefits (e.g. products that are

certified as sustainable, fair trade, organic or free range)

� Appropriate marketing to children and other vulnerable groups

� Providing information to consumers on healthy choices

� Investing in long-term food security

� Management and reduction of food waste

� Providing consumers with affordable healthy food choices

� Supporting local production

� Responsible retailing of liquor and gaming

� Customer service

� Ensuring that products are sourced and manufactured in an ethical way

� Local employment opportunities

� Engagement with local communities

� Helping customers to recycle and dispose of product and packaging waste

� Working with suppliers to reduce packaging

� Truth in advertising

� Maintaining ethical and fair relationships with suppliers

� Reducing energy use and greenhouse gas emissions in stores

� Sourcing suppliers of ethically and environmentally friendly products

� Providing a fair, equitable and safe workplace for its employees

� Working with suppliers to improve their own sustainability performance

� Reducing greenhouse gas emissions from transport and logistics

7. From the following list of issues relating to the management of workplace issues and culture,

where do you think Woolworths should prioritise investing its time and money? Choose 3

from the following list.

� Opportunities for indigenous employment

� Staff engagement in sustainability initiatives

� Staff volunteering opportunities

� Ensuring workplace safety

� Better collaboration between departments

� Traineeships for underprivileged members of the community

� Communication of company sustainability performance


8. In which age group do you fall?

Under 18 45 – 49

18 – 24 50 – 54

25 – 29 55 – 59

30 – 34 60 – 65

35 – 39 66 and older

40 - 44

9. Are you?

� Male

� Female

10. Where do you live?

� NZ

� NSW (inc ACT)

� VIC

� QLD

� WA

� SA

� NT

� Tasmania

11. Which of the following best describes your current family situation?

� Living with partner only

� Living with children only

� Living with partner and children

� Living alone

� Sharing accommodation

� Living with parents or guardian

� Other

12. How many children under 18 do you have living in your household?

Thank you for completing the Woolworths Sustainability Staff Engagement Survey. We appreciate

your time and feedback. If you would like to be entered in the draw for a chance to win one of five

$200 Wish gift cards please enter your name and payroll number below. Survey developed by Net

Balance Management Group Ltd, all survey responses will remain confidential and the property of

Woolworths Ltd.


Appendix C: Investor Interview Questions

The questions below were distributed prior to investor interviews as a guide for topics to be

discussed. On the day, these questions were posed to stimulate discussion.

1. As investors, what are your top of mind sustainability and corporate responsibility material

issues for the Woolworths Group over the next 5-10 years?

2. What issues pose the biggest risk to Woolworths?

a. Reputation in the community

b. Earnings

c. Growth

3. What regulatory challenges do you believe Woolworths will face in the next 5-10 years?

4. How do you believe Woolworths is positioned on these issues in comparison to peers and

competitors?

5. Which material issues do you believe Woolworths has:

a. The most control over

b. The least control over

6. What opportunities do you see for Woolworths to create value through proactively managing

some of these issues?

7. Are there factors that make Woolworths un-investable for funds or clients that you manage,

especially factors that could change?


Appendix D: CSI Materiality analysis results

For comparison to the final materiality analysis, the CSI analysis results from November 2010 are

included below:

Issue Scale Sensors Sensibilities Conclusion

Carbon emissions and energy use

Environmental Management

Environmental Design

Environmental Product Analysis and Labelling

Sustainable Resource Sourcing and Usage

Waste Reduction and Packaging

Food Waste and Food Rescue

Ethical Sourcing

Supplier Relationships

Water Use

Community investment

Competition and corruption

Key:

The scale, sensors or sensibilities on the issue are high

The scale, sensors or sensibilities on the issue are medium

The scale, sensors or sensibilities on the issue are low


Issue Scale Sensors Sensibilities Conclusion

Staff and the workplace

Health and nutrition

Marketing and customer relationships

Tobacco

Regional issues and the national supply chain

Petrol

Gaming

Liquor

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