Minimise the Group environmental footprint

Water conservation

We have continued to prioritise water conservation across our standalone facilities, expanding rainwater and condensate harvesting initiatives to a total of 85 Builders Warehouse and Makro stores. To identify further opportunities to minimise our water usage we have rolled out independent water meters to a further 27 sites. We estimate that Makro and Builders Warehouse saved approximately 20 million litres of water during 2016.

To further improve our understanding of water-related risk, we completed a desktop water risk assessment of our stores using the WWF’s online Water Risk Filter. We will, where necessary, develop additional water conservation guidelines based on the outcomes of this assessment.

Energy efficiency

Format-specific energy targets along with the on-going installation of energy-saving technologies continue to form part of our energy efficiency strategy. In 2016, a further 18 stores transitioned to LED lighting solutions, while 10 installed daylight harvesting modules and building management systems. These initiatives along with improved operational energy monitoring, resulted in Group electricity efficiency improving by 10%.

Aligned with our commitment to pilot commercially viable renewable energy alternatives, two solar photo-voltaic plants were erected in 2016. These plants, one situated at Makro Carnival and the other at Makro Woodmead, have the potential to generate approximately 2 million kWh of electricity a year. These plants will help reduce energy costs whilst also lowering energy related carbon emissions at these stores by approximately 30%. A third installation is scheduled to be completed at Builder’s Warehouse Northriding in March 2017. We will explore further opportunities to introduce additional renewable energy projects in 2017.

Operational waste recycling

Our objective remains to reduce waste to landfill by prioritising the separation and recycling of paper, plastic and board at our stores and distribution facilities. We have made considerable effort to improve our recycling rates by circulating online waste assessments, working closely with waste service providers and monitoring waste generation across our facilities.

Currently, 89% of all stores are actively engaged in separating and recycling their waste, resulting in an estimated 25,000 tons of waste being diverted from landfill in 2016. Those stores not recycling are located in areas where we are, at present, unable to find reliable vendors to perform this function.

During the year, Makro and Massbuild successfully negotiated national waste management contracts that have seen the number of waste service providers reduced by 86%. In Makro alone, associated cost savings have amounted to approximately R2 million.

Enable sustainable supply and consumerism

Environmental supplier advocacy

For the last seven years, Massmart has facilitated an environmental supplier advocacy programme which includes supplier environmental profiling, screening of high risk products (such as timber and seafood) and environmental assessments. Since the project’s inception, we have reviewed the sustainability practices of 1,200 suppliers, 340 of whom participated in assessments relating to sustainable seafood, timber, poultry and environmental practices during the year.

Survey highlights indicate that 11.1% more suppliers are focussing on improving the sustainability attributes of their products, while more than 63% of our suppliers are prioritising energy efficiency in their operations. However, disclosure of environmental indicators including energy usage, emissions and waste generation needs improvement.

To recognise the efforts of those suppliers who are making an industry leading effort to implement sustainability programmes within their businesses, we hosted our third Environmental Supplier Awards ceremony in October 2016. Distell Group was recognised as our Environmental Supplier of the Year for their investment in water conservation and renewable energy which will see them treat 200 million litres of water and generate more than 2 million kWh of renewable energy annually.

Priority-product screening

As part of our supply chain focus, we have prioritised products that are potentially vulnerable to exploitation and unsustainable utilisation. While sustainable timber and fresh and frozen seafood sourcing remain a high priority, we have expanded our focus to include canned tuna and poultry welfare.

Working in consultation with WWF:SASSI and our suppliers, we have formulated a canned-tuna policy to transition all sourcing to International Seafood Sustainability Foundation (ISSF) participants.

Our poultry welfare programme assesses bird welfare dimensions such as access to food and water, ventilation, temperature control and general bird health. These assessments are conducted by a specialist poultry veterinarian who has been appointed by Massmart.

We have, together with Conservation South Africa, built on our hardwood timber screening process. This has included combining chain of custody information, local legislation and species population health to develop a more rigorous hardwood rating tool to assist buyers to make sustainable sourcing decisions.

Packaging rationalisation project

We completed a private label packaging rationalisation audit covering six product categories across our Makro, Builders Warehouse and Game formats. External packaging consultants were engaged to assess private label packaging using a packaging scorecard. Packaging dimensions covered included: recyclability; safety; functionality; and resource efficiency.

Overall, the review indicated that the quality and sustainability of private label packaging is consistently high. Opportunities to improve pack performance and recyclability were identified across our detergents and food packaging ranges. One example of this is our decision to reduce the inclusion of colour additives in our private label detergent packs. Implementing cost-effective solutions in these areas, along with identifying opportunities to standardise and consolidate divisional packaging procurement, will be our priority in 2017.

Environmentally sensitive merchandise

We realise that we are well positioned to play a role in offering our customers products which reduce their environmental footprints and save them money.

During 2016, Builders, Makro and Game sold in excess of
1.4 million energy-saving light bulbs, which we estimate, help save our customers 98.9 million kWh of electricity a year. We have significantly expanded our range of renewable energy products to include solar chargers, small scale solar and inverter packages, and solar security lighting solutions. Last year we indicated that we would expand our range of water-saving products. We have done this, achieving sales of R119.3 million in 2016.

Post-consumer e-waste recycling

Electronic waste (e-waste) presents risks to both human health and the environment if not recycled and disposed of correctly, this has prompted the Department of Environmental Affairs to list it as a priority waste stream in South Africa.

Since 2008, Makro, first in partnership with Fujitsu Siemens and currently Samsung, has facilitated South Africa’s most successful retail-led, post-consumer e-waste take back programme. Makro offers e-waste take back across 20 sites countrywide that, in 2016, enabled the collection of 106 tons of post-consumer e-waste. We estimate that since inception, the project has resulted in the recycling of 845 tons of e-waste ranging from laptops and printers to washing machines and cellular phones.

A recent Massmart assessment of our e-waste service provider’s facilities in Cape Town, Gauteng and KZN, revealed that requisite record keeping processes were in place and environmental best practices were being followed.

Environmental performance indicators