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Addressing social and environmental challenges
FOOD SECURITY AND EDUCATION
By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round
Food donations and providing nutritional support to alleviate food insecurity in vulnerable communities is one of our key focus areas.
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During the period we placed a further 21 fully-equipped mobile food preparation kitchens at schools in KwaZulu-Natal, Limpopo, Mpumalanga and Gauteng. Since the projects inception in 2008, we have placed 350 mobile kitchens at schools in all nine provinces in South Africa. We estimate that our kitchens have enabled the hygienic preparation of nearly 400 million Department of Basic Education supplied meals over the last four years. During the period we worked with Gift of the Givers and Food Forward SA to donate 200 tonnes of food to communities in Alexandra, Tembisa, KwaMashu, Umlazi and Mitchells Plain.

In addition, we have prioritised providing disaster relief aid in the form of water, food, blankets and hygiene products to communities that have been impacted by natural disasters. In 2018 we, together with the Gift of the Givers, were the first responders in providing relief aid to community members in, amongst other areas, Alexandra, Lusaka, Soweto, Mitchells Plain and the Vaal.

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By 2030, ensure that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education
Our Corporate Social Investment (CSI) programme focuses primarily on school nutrition, Early Childhood Development (ECD) and school sports infrastructure and maintenance. During 2018 we invested R25.4 million, representing 2.9% of our net profit after tax, in CSI.
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During 2018, Makro, through its HOPE Worldwide South Africa partnership, supported 138 ECD centres. These centres assist in caring for more than 8,000 vulnerable learners up to the age of five years. The project centres around training educators, renovating and repairing ECD centres and providing supplementary nutritional support to learners.

Beyond the infrastructural and nutritional support provided, nationally 1,709 parents were trained through 122 parent support groups. These parent groups, which support a further 2,000 children annually, have been established specifically for children whose parents are unable to send them to ECD centres.

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Build and upgrade education facilities that are child, disability and gender sensitive and provide safe, non-violent, inclusive and effective learning environments for all
Builders Warehouse continued the roll-out of specialised multi-sport sports facilities through their Let’s Play partnership with SuperSport.
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The facilities, which are designed as sports hubs serving the broader community, were completed at Danville Primary School in Mahikeng and Khanyo Primary School in the community of Masiphumelele in the Western Cape. Since 2015, Builders has successfully completed nine multi-sport facilities which cater for soccer, netball, hockey and basketball and serve approximately 45,000 aspirant sports men and women across the country.

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CLEAN WATER AND SANITATION
By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity
Water scarcity and supply insecurity in sub-Saharan Africa necessitates businesses to take a more active role in conserving water resources and driving water-use savings.
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Through the continued implementation of water-harvesting infrastructure to capture rainwater and refrigerant condensate, we have reduced our municipal water use by an estimated 22 million litres across 88 Makro and Builders stores in 2018.

In response to the Day Zero crisis we also invested in 17 atmospheric water-generating plants to help reduce water consumption at facilities based in the Western Cape. These plants enable us to produce up to 20,000 litres of potable water a day, which is supplied directly to stores.

Stemming from the water insecurity challenges we observed in 2018, an analysis of existing real-time water metering has highlighted additional opportunities to drive water savings through early leak detection and stricter water management practices. To capitalise on these opportunities, we will be accelerating the installation of real-time water monitoring systems at high usage facilities. Our objective is to install smart meters at all standalone facilities by the end of 2020.

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AFFORDABLE AND CLEAN ENERGY
By 2030, double the global rate of improvement in energy efficiency
We continue to drive energy efficiency across our stores and DCs. This helps us to reduce operational costs and electricity-related emissions, which represent a significant portion of our greenhouse gas emissions.
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Group store energy intensity decreased by 3.9% to 204.9 kWh/m2, largely due to a drop in energy consumption across Massdiscounters stores. As previously reported, in 2013 we developed an energy efficiency roadmap that required a 10% improvement in energy efficiency by 2020. As we approach our 2020 energy efficiency milestone we are currently performing 16% ahead of our target, having avoided the consumption of 90,000 MWhs of energy in 2018 alone. We have achieved these savings through, among other things: the installation of energy efficient lighting; refrigeration and climate control systems; refrigeration doors; daylight harvesting cells; and stricter energy management and monitoring. As is the case with water consumption, our priority in 2019 is to accelerate the adoption of real-time energy monitoring across stores to achieve further energy consumption savings.

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By 2030, increase substantially the share of renewable energy in the global energy mix
Since our first solar photovoltaic installation in 2016, we have generated over 6.5 million kWh of renewable energy, and have over the last three years achieved a 500% growth in renewable energy contribution within the Group.
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In 2018 we completed another two plants at our Makro Springfield and Strubens Valley stores, bringing our annual generating capacity to 4.5 million kWh per annum. We have two further sites scheduled to come online in the first half of 2019 at our Makro Silverlakes store and Gosforth Park DC.

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Supplier Development Programme
Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalisation and growth of micro-, small- and medium-sized enterprises, including through access to financial services
We estimate that procurement from small businesses exceeded R3.4 billion in 2018.
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To help provide better access to our supply chain for small businesses, we launched the Massmart Supplier Development Programme (SDP) in 2012, which gives preference, but not exclusivity, to black- and black woman-owned enterprises. The aim of the SDP is to provide opportunities for small and medium manufacturing enterprises.

The work of the SDP involves assisting suppliers to increase overall competitiveness by meeting product quality standards, investing in bespoke manufacturing equipment to build capacity and providing retail and business management training. The programme currently has a portfolio of 24 small businesses which manufacture a variety of products ranging from chef wear, toilet seats and seedling trays to adhesives, cooler-boxes, bricks, nails and paint. Of the 24 suppliers enrolled in the programme, 13 provide Private Label products, eight are import substitution projects and six export products to countries such as Botswana, Zambia, Mozambique and Chile.

Total procurement from the SDP increased by 11% to just over R254 million in 2018. This included cooler box sales of R23.5 million, a 92% increase from 2017.

In 2018, we were awarded the ‘Overall Winner’ at the inaugural ABSA Business Day Supplier Development Awards, which attracted more than 400 entries from both private and public sector enterprises.

University of Pretoria, Gordon Institute of Business Science (GIBS)

Together with the Walmart Foundation and GIBS, we initiated a programme to support inclusive growth in township economies through providing training in entrepreneurship and practical business development. The programme, which focuses on identifying and supporting active township entrepreneurs, will be run nationally and aims to reach and empower 200 business men and women over the next two years.

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Broad-based black economic empowerment (BBBEE)
By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status
We see the advancement of BBBEE as a key driver of economic and social inclusivity. In 2018, we achieved a verified score of 80.81 and Level 4 contributor status. This is up from 66.63 in 2017 and was the highest among listed retailers.
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While our BBBEE performance improved across all scorecard elements, the most significant improvements were made in the following areas: recognition of employees with disabilities (+1.45 points); investment in employee training and skills development (+9.1 points); unemployed learnerships (+2.03 points); and preferential procurement spend (+1.3 points). We also, through the SDP, exceeded the BBBEE investment targets for enterprise and supplier development and corporate social investment.

Wildlands Rural Business Development Project

Massmart, together with the Walmart Foundation, supports a rural development programme in partnership with Wildlands Conservation Trust (Wildlands). The programme will provide an opportunity for individuals, recruited from Wildlands’ legacy Green-preneur networks, to establish their own small businesses through training, mentorship and bridging finance. The aim of the programme, over the next three years, is to help establish 200 sustainable small businesses in five of South Africa’s most underserved rural communities in Northern KwaZulu-Natal.

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Responsible consumption and production
By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse
The rapid increase in the volume of waste produced globally, particularly non-recyclable plastic waste, necessitates that retailers and consumer goods companies take decisive steps to minimise environmental impacts and pollution.
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As a retailer that generates a variety of waste types, we are tackling this issue by optimising the recyclability and resource efficiency of our Private Label packaging; diverting operational waste from landfill; and assisting in the reduction of high priority post-consumer waste, specifically electronics and appliances.

One good example of our efforts to introduce more sustainable packaging within our Private Label brands, is the redesign of the mBrand detergents line to include 50% post-consumer recycled material in the floor and tile cleaner, thick bleach, bathroom cleaner and dishwashing liquid containers. We also converted our all purpose cleaner packaging from white polyethylene terephthalate (PET) to white high-density polyethylene (HDPE) in order to enhance its recyclability.

Since 2017, we have increased the number of facilities actively sorting, separating and recycling paper, plastic and board from 72% to 93%. In addition to this, we are supporting a composting and waste-to-energy programme which has increased from 33 tonnes in 2017 to 250 tonnes in 2018. Collectively, we estimate that we now divert 15,354 tonnes of waste from landfill annually. Our priority for 2019 is to assist in reducing plastic waste, through more recyclable packaging design and piloting more impactful consumer recycling labels.

As sub-Saharan Africa’s largest electronics retailer, we acknowledge our role in providing safe disposal options for our customers’ electronic waste (e-waste). To assist our customers, we have facilitated South Africa’s longest running post-consumer e-waste recycling programme at our Makro stores. This programme, now in its 10th year, has seen a total of 1,117 tonnes of e-waste collected since its commencement, with 169 tonnes collected in 2018.

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Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle
It is important to us that the products we source are responsibly and sustainably manufactured and packaged.
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We engage with over 450 suppliers every year to advocate for improved efficiencies and more sustainable supply practices. This programme involves the deployment of an advocacy survey, from which feedback reports benchmarking individual supplier environmental performance are circulated to participating suppliers. In addition, environmental site visits are conducted annually with top performing and selected high environmental risk suppliers.

In 2018 we observed a marked improvement in supplier environmental performance, specifically in the areas of energy, water and waste. Additionally, there has been a rapid increase in the proportion of suppliers more actively monitoring and managing water usage, with 65% of suppliers implementing water management programmes, up from 50% in 2014.

Beyond environmental supplier advocacy, we support animal welfare issues in product categories where we have a direct influence. One such area is poultry egg production. During 2018 we facilitated a poultry welfare workshop with our egg suppliers to advocate for the consistent adoption of welfare practices and standards. As an outcome of this, we have contracted with an independent specialist poultry veterinarian to conduct on-site welfare audits at facilities that supply eggs to Massmart. We will continue to build on this initiative in 2019 with the objective of conducting welfare audits with all our egg vendors.

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By 2020, effectively regulate harvesting and end overfishing, illegal, unreported and unregulated fishing and destructive fishing practices and implement science-based management plans, in order to restore fish stocks in the shortest time feasible, at least to levels that can produce maximum sustainable yield as determined by their biological characteristics
We understand that our oceans and fisheries represent a valuable resource which needs to be carefully managed in order to ensure food security and ecosystem health.
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In 2011 we aligned ourselves with the WWF South African Sustainable Seafood Initiative guidelines and committed to working with our vendors to drive more sustainable fishing practices and avoid sourcing threatened, endangered or red-listed seafood species.

We engage with all of our seafood suppliers annually through the circulation of a seafood advocacy survey covering issues such as by-catch mitigation, stock health, and fishery improvement programmes. In addition, we conduct site visits and facilitate issue-specific seafood workshops which have previously addressed topics including, supply chain traceability, stock health assessments and International Seafood Sustainability Foundation (ISSF) tuna sourcing guidelines.

We also screen all of our fresh and frozen seafood and have partnered with the University of the Witwatersrand School of Animal, Plant and Environmental Sciences to conduct genetic identity testing of select national and Private Label products. During the period, we conducted a total of 26 tests covering 18 products. Our initial round of testing identified two issues of concern which we raised with the respective suppliers and we can confirm these have been resolved.

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By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally
Aligned to a Walmart commitment to net zero deforestation, we have concluded a source-of-origin sustainability review of our Private Label pulp and paper based products.
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In total, our Private Label products used approximately 1,338 tonnes of pulp and paper fibre, 91% of which was sustainably sourced. During the period we continued our sustainable hardwood screening and advocacy programme with our suppliers. The objective of this programme, which involves surveying suppliers annually to confirm species, country of origin and third party ecolabel certifications, is to bring key sustainability issues to the attention of our hardwood timber suppliers and to ensure that we do not source species that are considered to be threatened or endangered. Through our advocacy programme, we have identified that source-of-origin traceability remains problematic and inconsistent. To promote greater supply chain transparency we aim to host a timber workshop with our vendors in 2019 to develop more consistent product traceability protocols.

Although Massmart sources modest volumes of palm oil for its Private Label products, we support more sustainable palm oil production through the purchase of Roundtable on Sustainable Palm Oil (RSPO) PalmTrace certificates. We currently offset 100% of our Private Label palm oil usage through this initiative.

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Develop effective, accountable and transparent institutions at all levels
Develop effective, accountable and transparent institutions at all levels
In response to reports of state capture in South Africa, we have for the past three years, provided financial support to social justice organisations whose mandate it is to advocate for stronger governance within public and private institutions. Starting with three organisations, we have prioritised Section27, an organisation who focuses on healthcare service and basic education.
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Our support has taken the form of funding to assist with their legal advocacy efforts and providing access to our in-house market research function to assist in providing civil society and brand positioning insights.

Beyond the initiatives aligned to the United Nations Sustainable Development Goals covered above, we engage in a range of additional programmes including among other things: supporting the Department of Basic Education Matric Top Achievers Awards; assisting with the South African National Defence Force Goodwill parcel project; tracking and growing our range of renewable energy and water efficient products; and increasing community engagement through our Urban Bookshelf and ‘Sports in a Box’ programmes.

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