THE BIDVEST GROUP LIMITED Group-wide sustainability issues Group issues This report focuses on issues that can be aggregated to Group level and which can be sensibly governed by the Group with a common set of policies and reporting protocols. Issues relevant at divisional level are dealt with in the divisional sustainability reports. Issues are categorised according to the GRI (G3) framework and cover economic and environmental performance, labour practices and decent work, human rights, society through sound business ethics and product responsibility. Economic performance Economic performance describes and quantifies how we distribute the value channelled through the business, the opportunities we create and our economic contribution to society. This is distinct from financial performance which is extensively reported. In South Africa, BBBEE is the most material issue we manage under economic performance (reported at Bidvest South Africa level), while gender equity is an issue common to all operating environments. Distribution of economic value generated Despite tough trading conditions, the total number of employees remained stable in FY2011. Employment within South Africa is marginally down. How the Group s total income is shared between different stakeholders is presented in the value added statement in the financial section of the annual integrated report. Gender equality Bidvest seeks to provide equal opportunities for both men and women, in the process ensuring equal pay for equal work. Women constitute 43,1% of the total staff complement Progress is also being made across the Group, with female managers making up to 38,1 % (2010: 39%) of management. Bidvest Foodservice Australia reports annually to the Equal Opportunities for Women in the Workplace agency. Retirement funding The Group provides retirement benefits for permanent employees through pension funds with defined benefit and defined contribution categories and defined contribution provident funds or appropriate industry funds or appropriate country funds. (Notes to the consolidated financial statements provide further details.) Government assistance No Bidvest companies receive significant government assistance.
Public benefit infrastructure and services Individual companies are responsible for their own social investment programmes and donations. In South Africa in particular, individual companies are highly active in making appropriate corporate social investments. Environmental performance Climate change Bidvest has identified climate change as an important issue which may increasingly impact our operations. European companies in particularly have begun to prepare for economic and weatherrelated impacts. We pay close attention to regulatory changes, and increasingly seek to build in flexibility to improve resilience. Companies look for opportunities to improve our competitive position with respect to climate change. Our operations are already impacted by tightening government regulation and energy costs. In South Africa, rising electricity prices are a material issue for most divisions. In the UK and Europe, the Euro standard for vehicle efficiency requires that our operations constantly upgrade their fleets. We anticipate that international targets negotiated at the upcoming COP17 climate conference in Durban in November 2011 may be significantly increased, triggering governments to introduce further legislation to limit fossil fuel-based energy consumption. The South African government has already begun to talk about commitments which could have a major impact on: All businesses where transport constitutes a significant operational cost Bidtravel and Bidvest Services aviation-services businesses due to a possible increase in aviation fuel prices or flight taxation aimed at reducing airline industry emissions (perhaps cutting passenger volumes in the process) Bidvest Freight, with its dependence on international ocean shipping Bidvest Automotive as the market responds to the tax penalising high- emission vehicles by moving to public transport and other solutions Bidvest Paperplus as paper costs may rise as a result of pressures on the paper and pulp industry to reduce its carbon-intensity Climate change is also expected to impact the availability of natural resources. Fish stocks off the coast of Namibia may shrink or migrate due to changing ocean conditions, prompting smaller quotas. Businesses dependent on tourism and air travel may be at risk as a result of changing weather patterns, impacts on fauna and flora, extreme weather events and shifts in disease patterns. Foodservices and food processing businesses across all our markets may be impacted as agricultural yields change. Storms, floods and deteriorating infrastructure may impact logistics and freight operations.
Positioning Bidvest as a green company Bidvest recognises that these threats also contain opportunities. In response, our companies are building environmental excellence into our reputation for quality, service, health and safety. We are developing a sustainability plan which requires every division to create an environmental policy relevant to their business. This process will include a cost-benefit analysis of the impacts of climate change on the business and suggested responses. Improving the way we measure our environmental impact represents an important step. Not only do companies measure their consumption of fuel, electricity and other carbon-costly resources, they also increasingly monitor other processes that affect the quality and efficiency of operations. Electronic vehicle tracking allows monitoring of driver behaviour and has contributed to routing efficiency, in some instances cutting out the warehouse between supplier and customer. By sharing best practices through Bidvoice and quarterly sustainability committee meetings, companies are learning how to apply new technologies to their businesses. Believing that Green is Gold, Bidvest companies continue to develop new products and services at the forefront of environmental awareness and responsibility. Many of these initiatives are described in the divisional reports on the Bidvest website. Carbon footprint This year, Bidvest conducted its fifth greenhouse gas emissions inventory ( carbon footprint ), which included all Bidvest businesses. Data was collected in accordance with the Greenhouse Gas Protocol, compatible with other GHG standards such as the ISO 14064. Emitting activities include: direct greenhouse (GHG) emissions resulting from fuel used by vehicles and equipment owned or controlled by Bidvest; indirect emissions from purchased electricity (Scope 1 and 2); and selected indirect emissions, for example resulting from business travel in corporate aircraft, or methane and nitrous oxide emitted by equipment not owned or controlled by Bidvest (Scope 3 emissions). Emissions within Bidvest car rental operations resulting from client usage of Bidvest owned cars are not included. Bidvest s total carbon emissions increased to 693 340 tonnes CO2e (of which indirect emissions Scope 3 emissions totalled 318 107 tonnes CO2e). The 2010 carbon emissions reduced following adjustments to diesel, petrol and electricity usage. Using full-time employees (FTE) as a denominator, Bidvest s intensity of emissions were marginally up from 6,5 to 6,6 tonnes CO2e per FTE. Bidvest Services, with the highest number of employees, recorded the lowest emissions intensity of 0,4 tonnes CO2e per FTE. Conserving resources, recycling waste Bidvest companies are encouraged to monitor and measure the consumption of important resources such as water, paper and packaging materials, as well as the proportion recycled, reused or sent to landfill.
Many companies are beginning to develop their own industry-relevant intensity measures to help make sense of environmental performance indicators and allow better benchmarking. We intend to develop more of these in future, allowing businesses to track their performance regardless of changes in the scale of operations. Compliance with environmental laws and regulations Non-recyclable waste streams are separated and dealt with according to the latest waste handling standards and in accordance with the appropriate legislation; ie hazardous waste regulations and animal by-products regulations. Labour practices and decent work Employee engagement and satisfaction Resignations are proxy indicators of employee satisfaction. Resignations improved while absenteeism increased by 68%. Some companies conduct independent employee satisfaction surveys. Career development Our performance appraisal process for employees is based on two-way engagement, resulting in commitment to targets. Performance appraisals are not standardised across divisions, but standardised evaluation criteria are typically adopted within each organisation. Annual budgets, targets and operational objectives are set through the budgeting process and agreed between the business unit manager, divisional chief executives and Group chief executive. Skills training Skills training is recognised at Bidvest as the primary avenue for achieving competitive advantage at all levels of business and is the driving force behind our policy of promoting from within. Bidvest companies are often the leading providers of skills and education in their industries. Current year reported total training hours was down 11.2%, however the total training spend had increased by 2,7% Health, safety and wellness Many Group companies operate heavy equipment and handle hazardous products. Bidvest is acutely aware of the health and safety risks faced by employees and contractors and places the utmost importance on a safe and healthy working environment. Responsibility for health and safety is assigned to dedicated senior managers in all operations where safety and health are material issues. South African companies comply with the Occupational Health and Safety Act. International businesses meet relevant standards in their jurisdictions. Lost-time injuries increased by 17.4%.
The number of fatalities reported in the current year was nine (2010: 4). Each fatal incident was fully investigated in conjunction with the relevant authorities. Training to entrench safety awareness and reinforce safe behaviour is a constant focus for companies at risk. Human rights Bidvest publicly endorses the following charters/frameworks: UN Universal Declaration of Human Rights The Bidvest Charter (BEE and transformation) Various sectoral charters, such as the aviation, tourism and financial industry charters, to which business units are signatories Additional commitments on conduct, ethics and human rights as outlined in the corporate governance report in the annual report. Statements are backed by policy documents accepted by the Group, divisional and business unit boards and all Bidvest companies as part of their basic business operations. Policy statements are designed to underline the need for compliance with national, social and human rights frameworks and charters. Companies are typically members of industry associations, which usually cover these issues and include their own code of ethics on labour practices. In South Africa, human rights issues such as freedom of association and freedom from child labour or forced or compulsory labour are enshrined in South Africa s constitution and well legislated under various relevant acts. Our companies comply with human rights legislation, the South African Basic Conditions of Employment Act and the Child Protection Act. A key dispute resolution mechanism in southern Africa is the Commission for Conciliation, Mediation and Arbitration (CCMA), a body established by the Labour Relations Act, 66 of 1995. Bidvest companies in South Africa and Namibia faced 1528 cases (2010: 1434), with 60% cases ruling in our favour. No Department of Labour fines were incurred for non-compliance. All business is conducted according to ethical standards in line with our Bidvest Code of Ethics, which include the fair treatment of all employees. Incidents of discrimination are monitored in accordance with legislation and there were no significant incidents. Screening of international suppliers and contractors is largely covered by the quality of our business associations, as we deal with well-known, reputable brands. Formalised screening of suppliers is not yet in place in all divisions, and we acknowledge that this is an area for improvement in the future. Society through sound business ethics Fines and penalties are incurred throughout the business. Management treats these violations seriously and investigations followed by corrective action are a high priority. The fines incurred related to issues such as traffic violations, tax related penalties, product responsibility issues etc, while client and employee fraud accounted for most of the value.
Anti-competitive behaviour Risk of anti-competitive behaviour is managed through a number of means at the divisional level, including rules governing credit, discounts, and anti-corruption. Every board meeting includes an agenda item to address the risks of anti-competitive behaviour and conflict of interest, to confirm that neither is taking place. It is the responsibility of individual board members to monitor their own areas of responsibility in this regard and carry this message and Bidvest s values to their areas of the business. Many companies have responded with awareness campaigns to reinforce ethical business practices. Bidvest makes no contribution to political parties. In the past, company representatives would gather to discuss common issues through industrywide organisations. Increasing awareness of the risks of collusion and anti-competitive behaviour has meant that companies increasingly tend to treat such interactions with competitors with caution or avoid them. Audit committees play an oversight role, recording no significant incidences of corruption or anticompetitive behaviour. We are confident that our businesses are competing fairly in the marketplace. While guided by internal codes, Bidvest companies also comply with the legislative frameworks of host countries. We are similarly compliant in other markets. Fraud and theft We have a policy of zero tolerance with respect to fraud at any level in our organisation. We take any occurrence of fraud very seriously and any employee involvement results in immediate dismissal and legal action. All incidents of fraud were reported to divisional and as applicable group risk and audit committees for appropriate action to be taken. In some companies, stock theft or other pilfering is an area of significant risk. Measures are in place to manage employee behaviour, instill a culture of integrity, and monitor and carefully control stock. We assist the police and push hard to prosecute any offenders. Frauds up to R1 million are dealt with at divisional level. These are recorded and reported on at quarterly audit committee meetings. Issues in the R1 million to R10 million band are reported to the Group audit committee, but dealt with at divisional level. Issues involving more than R10 million are reported to Group audit committee and dealt with at Group level. Whistle-blowing hotline report In addition to other compliance and enforcement activities, the board recognises the need for confidential reporting ( whistle-blowing ) of fraud, theft, breach of ethics and other risks. Whistleblowing procedures and our 24-hour call centre ensure formal reporting and feedback. We encourage employees to report any activity they believe to be in breach of the code of ethics and provide access to the hotline via a toll-free phone number, e-mail, fax, letter or SMS.
Impact of operations on communities As an international services, trading and distribution company, Bidvest has a limited impact on local communities. With respect to Bidvest Namibia s fishing operations, the impact on the Walvis Bay community is very positive. Product responsibility As part of its commitment to responsible corporate citizenship, Bidvest takes product responsibility issues seriously. These include monitoring and improving customer satisfaction, maintaining and improving food safety controls, and ensuring fair and accurate advertising and labelling of products. Protecting customer privacy is also a priority. Managing customer relations occurs at divisional and business unit level, and is reported in divisional and online reports. Corporate social investment CSI takes on a different flavour in different regions where we operate. For example, while senior citizens are a focus in some European companies, disaster management was a focus in New Zealand this year, and education and poverty alleviation are recurrent issues in South Africa. Bidvest has a three-tiered CSI strategy which accommodates the need for a flexible approach according to region: Tier one Corporate supports a number of overarching worthy causes Tier two individual divisions support their own flagship projects Tier three individual businesses support community-based projects in their operational areas Staff members responsible for these programmes assess the impact and outcomes of each programme and adjust investment accordingly. Corporate encourages and guides CSI by sharing success stories in Bidvoice, on the website, the intranet, in reports, at roadshows and at company gatherings. Rally to Read is one example of a South African CSI flagship programme.