Integrating sustainability into our core business

Having laid the foundations for sustainable practices over the past five years, we are now focused on driving sustainability thinking into our core activities. Our emphasis is on fresh thinking and innovation, based on the clear analysis of the significant risks and opportunities we face in creating a resilient business in a time of increasing uncertainty.

The impetus for this shift has come from several sources:

• Tougher trading conditions and tighter margins driving efficiency in every context
• National and global shifts towards integrated accounting and reporting practices
  
  

This report provides a high-level overview of our sustainability initiatives. Further detail on our performance and efforts may be accessed via our website (www.picknpay.co.za) as indicated in the table below.

		Integrated Annual Report	Sustainability Report	Sustainability website
	Stakeholders addressed	Financial stakeholders	Broad spectrum of stakeholders, including employees, suppliers, media and government agencies	Customers
	Format	Printed and available on our website	Available on our website	Link from PnP Homepage
	Frequency	Annual	Bi-annual	Updated continually
	Covers	High level strategy, with clear links to value drivers   Overview of performance	Detailed report on sustainability initiatives   GRI table	Latest developments   Practical suggestions for action   Opportunities for engagement

Responding to our commitments

	Last year we said we would:	Since then, we have:
	Ensure the Pick n Pay sustainability narrative is shared by our managers	Continued dialogue within our Executive Sustainability SteerCom  Established an Operational-level Sustainability SteerCom enabling key managers to discuss and debate the risks, opportunities and key material issues driving our sustainability efforts  Heightened our communication drive across all internal channels
	Clarify performance indicators for key commitment areas	Restructured our KPI system to reflect our most material sustainability issues   Established specific targets in key areas and continue to track base-lines to inform target-setting in other areas
	Develop a more robust system to track and communicate performance	Committed to implement the SAP sustainability module, allowing for enhanced data management across our company   Published our first Integrated Annual Report  Developed a detailed and accessible Sustainability Report available on-line  Enhanced our website to reflect our commitments and encourage customer action on sustainability
	Consolidate our supplier initiatives to encourage more active sustainability commitment	Expanded our PnP green range and other ethical and green products  Extended and enhanced our supplier audit programme  Intensified our engagement with small-scale farmers and small business owners

Focusing on our material issues

As a food retailer, growing concern around our national food security is of critical importance to our business. Our material issues are framed by six focus areas, each of which contributes to addressing this critical challenge. The table below indicates how each of these areas creates shared value for a range of stakeholders, as well as enhancing our core business strategy.

	Focus area	Creating shared value	Link to core business strategy
	Enhancing governance and accountability	Develops trust and accountability between stakeholders	Ensures compliance with existing and emerging codes of good governance
	Providing safe food and expanding sustainable product lines	Promotes health and the good functioning of natural systems	Addresses increasing demand for ethical and green products, sustains viability of supply and drives innovative thinking and action
	Building a resilient supply base	Provides market access for producers and a support system for small-scale suppliers	Supports existing supply chain initiatives, consolidating our relationship to suppliers
	Empowering our people	Provides personal and career development, and an opportunity to contribute positively to social change	Enables employees to act as brand ambassadors for social responsibility
	Working for a clean and healthy environment	Promotes eco-system function and restoration	Manages environmental risks and achieves cost reductions in the short, medium and/or longer term
	Supporting communities in their contribution to change	Builds social capital by encouraging action towards a sustainable society	Builds the brand by putting social responsibility into action

The greatest leverage for our sustainability efforts lies in our supply chain and by encouraging positive action through our brand. Our efforts in this respect have been acknowledged during 2010 by the Sunday Times (awarded Green Retailer of the Year), Mail & Guardian (Most innovative environmental strategies that improve business performance) and the Consumer Goods Council of SA (Green Supply Chain Award).

We believe the challenges ahead are serious and our sustainability initiatives are designed to strengthen our company as well as expanding the value we contribute to society.