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 2019 Good Business Journey Report

WOOLWORTHS HOLDINGS LIMITED - 2019 Good Business Journey Report - Woolworths Holdings ...
M A N AG I N G                      P E O P LE A N D              SOCIAL          H E A LTH A N D     ETH I C A L    S U STA I N A B LE                WA STE                WATE R              E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N      D E V E LO PM E NT    W E LLN E S S    S O U RC I N G      FA R M I N G                                                          C LI M ATE C H A N G E

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S U STA I N A B I LIT Y            TR A N S FO R M ATI O N                  D E V E LO PM E NT                 W E LLN E S S                 S O U RC I N G      FA R M I N G                                                                           C LI M ATE C H A N G E

                                                                                                                                                                      GOVERNANCE                                                      FO RWARD - LO O KI N G STATEM E NTS
                                                                                                                                                                      The Sustainability Committee, a sub-committee of the            Certain statements in this report may constitute forward

                    OUR GOOD BUSINESS
                                                                                                                                                                      Woolworths Holdings Board, has oversight of the Group’s         looking statements which, by their nature, involve risk
                                                                                                                                                                      sustainability strategy. The committee is chaired by a non-     and uncertainty because they relate to future events
                                                                                                                                                                      executive director and meets twice a year to review the         and circumstances that may be beyond the Group’s control.

                     JOURNEY REPORT
                                                                                                                                                                                                                                      The directors, therefore, advise readers to use caution
                                                                                                                                                                      progress of the Good Business Journey programme, as well
                                                                                                                                                                                                                                      regarding interpreting any forward-looking statements in
                                                                                                                                                                      as to approve strategic matters arising for continuity of the   the report.
                                                                                                                                                                      programme. The Group Chief Executive Officer and the
                                                                                                                                                                      Woolworths SA Chief Executive Officer are members of the
                                                                                                                                                                      committee, together with three independent directors.
                                                                                                                                                                      These independent directors each have significant expertise
                                                                                                                                                                      and experience in a range of corporate sustainability
                                                                                                                                                                      issues. The David Jones and Country Road Group Executive
                 This is the 2019 annual sustainability report of Woolworths Holdings Limited (WHL or the Group).                                                                                                                     APPROVAL AND ASSURANCE
                                                                                                                                                                      Committees review Good Business Journey progress on a
                        The report covers the 53 weeks ended 30 June 2019 and provides an overview of our                                                                                                                             The Group has always looked at obtaining independent
                                                                                                                                                                      regular basis as well. Both the David Jones and Country
                                                      Good Business Journey.                                                                                                                                                          opinion on our progress as a crucial part of gaining and
                                                                                                                                                                      Road Group Boards also receive Good Business Journey
                                                                                                                                                                      progress updates at each Board meeting.                         maintaining credibility with our stakeholders.
                                                                                                                                                                                                                                      Ernst & Young Inc. (EY) has been engaged, for the
                                                                                                                                                                                                                                      ninth consecutive year, to perform a limited assurance
                                                                                                                                                                                                                                      engagement for certain quantitative information contained
                                                                                                                                                                                                                                      in this current report as follows:
           SCOPE AND BOUNDARY OF                                                       REPORTING FRAMEWORK
           THIS REPORT                                                                                                                                                                                                                •	Water usage for Woolworths head office, stores, and
                                                                                       As with our 2019 Integrated Report, we have considered                         2019 SUSTAINABILITY REPORTING SUITE                                distribution centres
           The companies covered by this report are Woolworths,                        the application of the six capitals (as recommended by the
                                                                                                                                                                      Complementing the Good Business Journey Report are a            •	Percentage of Woolworths branded fashion, beauty
           Country Road Group, and David Jones. The report is aimed                    International Integrated Reporting Council) in our thinking
                                                                                                                                                                      number of other reports targeted at specific stakeholders.         and homeware locally sourced
           at providing an overview of our sustainability strategy and                 about sustainability. Where this report predominantly covers
           progress to date, as well as future plans. It is intended to                the aspects related to human, social and relationship, and
           be read in conjunction with the 2019 Integrated Annual                      natural capitals, the Integrated Annual Report offers details                  THESE REPORTS ARE THE:
           Report and the 2019 Annual Financial Statements, as a                       about financial, manufactured, and intellectual capitals. This                 • Integrated Annual Report, which provides an overview of            See EY’s 2019 independent assurance report
           compendium of our strategy and performance. We follow                       report references the GRI Standards. The detailed GRI index                       the Group’s performance, value created for stakeholders,
           a robust risk assessment approach to determine our risks                    can be found at www.woolworthsholdings.co.za. WHL is a                            contribution to society, and how the Group’s strategy,
                                                                                                                                                                         governance, and performance add to the creation of           Various other verifications and assurances by a range
           across all focus areas as well as key stakeholder groupings.                signatory to the UN Global Compact, and this report also
                                                                                                                                                                         value over the short-, medium-, and long-term                of audit, technical, and scientific experts are obtained
           The principles that underlie the precautionary approach                     serves as our Communication on Progress (COP). We have
                                                                                                                                                                      • A nnual Financial Statements, providing a more detailed      over different aspects of our Good Business Journey.
           inform our governance and enterprise risk framework as                      also aligned to the UN Sustainable Development Goals
                                                                                                                                                                         understanding of the financial aspects of our business       These are documented in an assurance summary in an
           well as our strategy. With respect to our sustainability                    (SDGs), as well as national development priorities of all the
                                                                                                                                                                      • S ummarised Remuneration Report, providing key features      appendix to this report.
           impacts, risk registers are developed for key business areas                countries we operate in. The report also applies the King IV™
           to ensure that all identified risks are documented, weighted                principles. We welcome any feedback on our programme                              of the Remuneration Report
           according to the agreed risk assessment method, and                         and reporting. Contact details for this purpose can be found                   The Integrated Annual Report and Annual Financial
                                                                                       at the end of the report.                                                      Statements, and Summarised Remuneration Report                        See Assurance Summary
           action plans are identified to mitigate the risk.
                                                                                                                                                                      are available online on our corporate website,
                                                                                                                                                                      Various appendices to this report, including a glossary,        We feel that the combination of verification and
                                                              Icons used throughout this report                                                                       other supporting documents and compliance information           assurance processes provides coverage for all our
                                                                                                                                                                      not included in these reports can be accessed on our            material focus areas.
                                                                                                                                                                      corporate website, www.woolworthsholdings.co.za

               People &             Social               Health          Sustainable      Ethical         Waste           Water          Energy &
            Transformation       Development           & Wellness         Farming        Sourcing                                     Climate Change

                                                                                                                                                                      THE SUSTAINABILITY COMMITTEE HAS REVIEWED
          The contents of this 2019 Good Business Journey Report are broadly comparable with that of the 2018 Good Business Journey Report.                           AND RECOMMENDED THE GOOD BUSINESS JOURNEY
                                                                    See 2019 sustainability reporting suite                                                           REPORT TO THE BOARD FOR APPROVAL.

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                                                                                                                                                                Q U I C K ACC E S S TO S ECTI O N S

                                                                                                                                                1                              15                                           29
                                                                                                                                            MANAGING                      PEOPLE AND                                    SOCIAL
                                                                                                                                          SUSTAINABILITY               TRANSFORMATION                                DEVELOPMENT

                                                                                                                                             43                               53                                            67
                                                                                                                                          HEALTH AND                        ETHICAL                                   SUSTAINABLE
                                                                                                                                           WELLNESS                        SOURCING                                    FARMING

                                                                                                                                             77                                91                                        103
                                                                                                                                                                                                                    ENERGY AND
                                                                                                                                             WASTE                           WATER                                CLIMATE CHANGE

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S U STA I N A B I LIT Y            TR A N S FO R M ATI O N          D E V E LO PM E NT                  W E LLN E S S                    S O U RC I N G      FA R M I N G                                                                                C LI M ATE C H A N G E

               COMMITTEE CHAIRMAN                                                                                                                                           KEY MATTERS DISCUSSED BY
               & GROUP CEO’S REPORT                                                                                                                                        THE SUSTAINABILITY COMMITTEE

           Now in its 12th year, our Good Business Journey (GBJ) continues       We continue to make progress on the responsible sourcing of                              The Sustainability Committee (the committee) ensures that the sustainability strategy positions the Group as
           to grow from strength to strength and is entrenched at the            our key commodities such as cotton, timber, viscose, leather,                            a leader in responsible retailing in the countries in which it trades. It further oversees that the sustainability
           heart of our Group. The ethos behind it, though, goes back            soy, cocoa, and palm oil. This year, we were also proud to                               initiatives and objectives are effectively integrated into the business and that the Group operates in an
           to the very beginning of the Woolworths business. We                  achieve a milestone, in that 100% of Woolworths’ food and                                environmentally responsible manner. Details of the committee composition and attendance at meetings are
           have always been driven by a strong set of values and the             pet food lines are currently GMO free.                                                   included in the Integrated Report, while the committee‘s terms of reference are available on our website at
           recognition that we can only be successful if we address the          Our people, customers, and local communities are the engine                              www.woolworthsholdings.co.za.
           sustainability of our business across the entire value chain,         that drive our business. During the year, David Jones launched
           from within our own operations to our supply chain, our               its Reconciliation Action Plan, a two-year strategic and                                 KEY MATTERS DISCUSSED DURING THE YEAR:
           customers, our community and our products.                            operational management framework approach to bridging
                                                                                                                                                                          • Reviewed the Group’s sustainable development (Good Business Journey) strategy and performance
           This can be challenging, particularly in the complex global           actual and perceived gaps between Aboriginal and Torres
           context within which we operate. There are concerns about             Strait Islander peoples and non-indigenous employees,                                    • D
                                                                                                                                                                             iscussed contextualisation of the Group’s 2020 water target, taking into account the wide variety of
           the carrying capacity of our planet, particularly with regards        customers, and communities.                                                                work the Group is undertaking with regard to water stewardship, quality, and efficiency
           to its ability to provide food and essential ecosystem services       The Group contributed over R852 million towards corporate                                • C
                                                                                                                                                                             onsidered customer feedback on their perceptions of the Good Business Journey with particular reference
           to a growing population. The accelerating impacts of climate          social investment causes. R83 million was contributed through                              to packaging
           change are becoming increasingly visible, and the extreme             the MySchool MyVillage MyPlanet programme and R611 million                               • Monitored the roll-out and implementation of our zero packaging waste to landfill vision and commitments
           weather events related to it have not been experienced at             in surplus food was donated to those in need. The annual                                 • C
                                                                                                                                                                             onsidered feedback on various local and internal stakeholder engagements as well as the ongoing
           this scale and frequency before. This is putting additional           Witchery White Shirt campaign raised A$1.7 million for the                                 partnerships in initiatives to remain at the forefront of sustainability
           strain on our food production systems and our globalised              Ovarian Cancer Research Foundation. Furthermore, we
           supply chains. At the same time, our customers’ perceptions                                                                                                    • Monitored international developments in sustainable fibres and the Group’s ethical sourcing strategy
                                                                                 spent over R146 million in skills development initiatives for our
           around health and wellness are changing, as more and more             employees. Through the implementation of our GBJ we have                                 • M
                                                                                                                                                                             onitored the restructuring of the regional sustainability team in Australia and alignment of the Australian
           people are shifting to healthier lifestyle choices, which, in turn,   achieved R1 424 million in operational and process savings                                 group’s programme with that of the Good Business Journey
           impacts their purchasing decisions. This is coupled with the          to date.                                                                                 • C
                                                                                                                                                                             onsidered assurance coverage of the Good Business Journey focus areas and appointed the report’s
           continuing focus on plastic and packaging. Operating in South                                                                                                    assurance service provider
                                                                                 We are immensely proud of the recognition we have
           Africa, we are also deeply conscious of our role in the broader
                                                                                 received over the last year for our GBJ performance and
           community, particularly in these stressed economic times.
                                                                                 related reporting, including our inclusion in the Dow Jones                              Topics related to people and transformation, employee health and wellness, and social development were
           Looking back on the past year, we continued delivering                Sustainability Index and FTSE4Good Emerging Index Series.                                discussed by the Social and Ethics Committee during the year. Further information on these topics is provided
           on our ambition of zero packaging waste to landfill via
                                                                                                                                                                          in the Social and Ethics Committee Report.
           a number of initiatives across the various companies in
                                                                                 LOOKING AHEAD
           the Group. A significant development was Woolworths
           rolling out plastic-shopper-bag-free stores supported by              Our vision is to be one of the world’s most responsible
                                                                                                                                                                                See Integrated Report
           the development of new, low-cost reusable bags as an                  retailers, and embedding the GBJ remains one of our key
           alternative to the traditional plastic bag. The business also         strategic focus areas. We aim to continue to do business in                                    See Social and Ethics Committee Report
           removed plastic straws and cutlery from stores as well as             the most transparent and ethical way possible, managing our
           plastic-stemmed earbuds. Numerous other projects are in               environmental and social impacts in our value chain. This aligns
           the works to deliver the ambitious target. At the same time,          to our Woolworths Holdings values, and is nothing less than
           it is important to note that we are not on this packaging             what our stakeholders expect.                                                            “WE BELIEVE WE CAN CONTINUE TO DO GOOD
           journey alone and continue to collaborate with a variety of
           stakeholders on a range of issues.                                                     Simon Susman
                                                                                                                                                                            BUSINESS BY DOING BUSINESS IN A GOOD WAY,
           The sustainable sourcing of our products was a key focus                               Chairman, Sustainability Committee                                        CREATING REAL VALUE FOR OUR STAKEHOLDERS.”
           area during the year. As part of our commitment towards
           increasing transparency with our customers, both Country                                                                                                            – Simon Susman, Chairman, Sustainability Committee
                                                                                                  Ian Moir
           Road Group and David Jones published their supplier lists and
                                                                                                  Group Chief Executive Officer
           signed the Bangladesh Accord on Fire and Building Safety.

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S U STA I N A B I LIT Y            TR A N S FO R M ATI O N         D E V E LO PM E NT               W E LLN E S S                  S O U RC I N G      FA R M I N G                            C LI M ATE C H A N G E

                                           A TRIBUTE TO
                                          SIMON SUSMAN
                                                       From Hubert Brody, Deputy Chairman

                      It is with great gratitude that we say farewell to
                    Simon Susman at our 2019 Annual General Meeting.

                                                                                                                                                                                           SIMON WAS ALSO
                          Simon has been part of Woolworths for almost 40 years and his contribution to the Group has been
                       invaluable. Notably, he was the architect and driving force behind our very successful Food business and
                                                                                                                                                                                           IN INSPIRING AND
                      further held a number of top executive positions in the Group before becoming the Chief Executive in 2000.                                                           IMPLEMENTING OUR
                            Simon was also particularly instrumental in inspiring and implementing our Good Business Journey.
                              Through this programme, the Group continually strives to do business in a way that is deeply
                                                                                                                                                                                           GOOD BUSINESS
                                                     sustainable, both socially and environmentally.                                                                                       JOURNEY. THROUGH
                       Simon will become Honorary President upon conclusion of the 2019 WHL Annual General Meeting, where
                          he will step down as a director. He will provide support and advice to the Board and continue his
                                                                                                                                                                                           THIS PROGRAMME, THE
                              deep association with the Group by devoting his time to the continued advancement of                                                                         GROUP CONTINUALLY
                                                  WHL’s participation in civil and corporate society.
                             On behalf of the Board, management and all our employees, we wish to extend our deepest
                                                                                                                                                                                           STRIVES TO DO BUSINESS
                           thanks and appreciation to Simon for the passion and wisdom that he has shared with us and for                                                                  IN A WAY THAT IS
                             building Woolworths into a company that is deeply rooted in values, passionately delivers on
                                                sustainability, and brings real value to all stakeholders.                                                                                 DEEPLY SUSTAINABLE,
                                                                                                                                                                                           BOTH SOCIALLY AND

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S U STA I N A B I LIT Y            TR A N S FO R M ATI O N          D E V E LO PM E NT                  W E LLN E S S                  S O U RC I N G                  FA R M I N G                                                                           C LI M ATE C H A N G E

                                                                                  HIGHLIGHTS & ACHIEVEMENTS
                                                                                                                                   (JULY 2018 – JUNE 2019)

                                                                                                                                                                              David Jones and Country               Woolworths wins a Legends of Empowerment                 David Jones and Country
                                                                                           David Jones launches its Reconciliation Action Plan, a two-                        Road Group hold a Good                Award at the 2019 Top Empowerment Awards.                Road Group announced
                                                                                           year strategic and operational management framework.                               Business Journey focus week                                                                    as two of 12 leading
                                                                                                                                                                              at head office to increase                                                                     representatives on the APCO
                                                                                                                                                                              employee awareness and                                                                         Collective Action Group,
                                                                                                                                                                              engagement on sustainability.                                                                  charged with overseeing the
                                                                                                                                                                                                                                                                             progress of Australia’s 2025
                                                        Woolworths launches                                                                                                                                                                                                  National Packaging Targets.
                                                        a new plant-based
                                                        protein range of foods.
                                                                                                                                                                                                                                                    Woolworths rolls out additional
                                                                                                                                                                                                       Woolworths’ WBeauty joins                    plastic-bag-free Food stores and
                                                                                                                                                                                                       forces with make-up maestro to               Politix switches from plastic bags
                       Mimco celebrates ‘Sustainability                                                                                                          Woolworths removes                    the stars, Sir John, to launch a             to recyclable paper bags.
                       Week’, highlighting its efforts in                                                         Witchery donates A$1.7 million to the          plastic-stemmed                       10-piece, cruelty-free, and 100%
                       designing more sustainable products.                                                       Ovarian Cancer Research Foundation.            earbuds from stores.                  vegan make-up collection.

              Jul                          Aug                   Sept                     Oct                      Nov                        Dec                  Jan                    Feb                     Mar                     Apr                     May                           Jun

           MySchool MyVillage MyPlanet                                                                                                                                                                                                                                                 Woolworths
           receives three International                                                                                         Woolworths Palmyra store receives a 6-star rating                         David Jones and Country Road Group become                                    removes plastic
           Loyalty Magazine Awards,                                                                                             from the GBCSA, the highest rating possible.                              signatories to the Bangladesh Accord on Fire and                             cutlery and straws
           including the Best Corporate                                                                                                                                                                   Building Safety, and, as part of their commitment                            from stores.
           Social Responsibility Initiative                                                                                                                                                               towards increasing transparency with customers,
           Linked to Loyalty Award.                    Woolworths Waterstone                                                                                                                              publish their supplier lists.
                                                       store receives a 4-star           Woolworths pies
                                                       rating from the Green             become the very
                                                       Building Council of               first South African
                                                                                         made food products                                                                                                             Country Road Group launches a collection made from traceable and verifiable
                                                       South Africa (GBCSA).
                                                                                         containing certified                                                                                                           Australian merino wool and introduces a range of men’s ‘low water wash’ denim.
                                                                                         sustainable palm oil.

                                                                                                                                                          David Jones and Country Road Group host the first                                     See full list of awards, recognition, highlights
                                                                                                Woolworths trials a plastic-bag-free Food                 Australian Packaging Covenant Organisation (APCO)                                     and achievements for the year
                                                                                                store and rolls out low-cost reusable bags.               Clothing Fashion and Footwear Industry Roundtable.

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                                                       ABOUT THE
                                                       WHL GROUP
           Woolworths Holdings Limited (WHL) is a southern hemisphere retail Group that has been listed on the Johannesburg Stock
           Exchange Limited (JSE) since 1997. It is one of the top JSE-listed companies and has a market capitalisation of R51.3 billion as at
           30 June 2019. Approximately 41% of revenue is derived from Australian operations. The Group trades through three operating
           subsidiaries, which include Woolworths Proprietary Limited (Woolworths or WSA), Country Road Group Proprietary Limited
           (Country Road Group or CRG), and David Jones Proprietary Limited (David Jones or DJ), acquired as of 1 August 2014 and
           formerly listed on the Australian Securities Exchange (ASX). Woolworths Financial Services Proprietary Limited (WFS) is a joint
           venture with Absa Bank, which holds the controlling interest.
           From an operating perspective, Woolworths is the biggest contributor to Group turnover and profit and thus has the largest
           sustainability impact across the Group.

                                                       PROFILE Leading South African                                               Group turnover (including
                                                       retailer offering a range of                                                concession sales)
                                                       primarily private label products

                                                       OFFERING A selected range
                                                       of quality fashion, beauty,                               75.3%             Group adjusted profit
                                                                                                                                   before interest and tax
                                                       homeware, and food products.
                                                                                            TRADING SPACE
                                                       Financial services are provided
                                                                                            733 000 m2
                                                       through Woolworths Financial
                                                       Services (WFS)                                            90.0%             of targets achieved on
                                                                                                                                   sustainability scorecard

                                                       PROFILE One of Australia’s
                                                       leading premium department
                                                                                                                 27.1%             Group turnover (including
                                                                                                                                   concession sales)


                                                       OFFERING Leading international                            6.7%              Group adjusted profit
                                                                                                                                   before interest and tax
                                                       and local brands with a private
                                                                                             RADING SPACE
                                                       label clothing, homeware, and
                                                                                            475 000 m2
                                                       food offering
                                                                                                                 83.0%             of targets achieved on
                                                                                                                                   sustainability scorecard

                                                                                                                                   Group turnover (including
                                                                                                                                   concession sales)
                                                       PROFILE Leading Australian
                                                       speciality retailer

                                                       OFFERING Stylish, high-quality
                                                                                                                 18.0%             Group adjusted profit
                                                                                                                                   before interest and tax
                                                       apparel, accessories,
                                                                                           TRADING SPACE
                                                       footwear, and homeware
                                                                                            121 000 m2
                                                                                                                 84.0%             of targets achieved on
                                                                                                                                   sustainability scorecard

                                                                                                              On a comparable 52-week basis as at
                                                                                                              30 June 2019.

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                                                  OVERVIEW OF THE GOOD BUSINESS JOURNEY
                                                                                                                                      OUR VISION IS TO BE ONE OF THE WORLD’S MOST RESPONSIBLE RETAILERS

            GOOD BUSINESS                                                            The Good Business Journey facilitates our vision to be one of the world’s most responsible retailers. It is our Group-wide plan to make a difference for our people, our communities, and for the environment.
            JOURNEY STRATEGY                                                                                                                   Embedding the Good Business Journey is one of the WHL Group’s strategic focus areas.

                                                                                                                                                     See more information on the Group’s strategic focus areas in the Integrated Report

                                                    Our material issues ultimately inform and influence our Good Business Journey strategy and focus areas. In order to identify our material issues, each year, we consider the operating and sustainability context, the results of stakeholder engagement, as well as our strategic risks.
            WHL GROUP                             The Group has identified talent and change management and responsible retailing as material issues at a macro level. These issues are further broken down in our Good Business Journey and are addressed through the related eight focus areas and are reported on in this report.
                                                                                                                                                   See more information on the Group’s macro-level material issues in the Integrated Report

            GOOD BUSINESS
            JOURNEY FOCUS
                                                People & Transformation                 Social Development                     Health & Wellness                    Sustainable Farming                    Ethical Sourcing                           Waste                                 Water                       Energy & Climate Change

                                                                                                                           We need to create a safe                                                                                                                                                                      To address the risks to
                                                                                                                              and healthy working                                                        To manage our ethical               We need to reduce the                                                     our business from climate
                                                                                          As a responsible                                                        We need to contribute                                                                                           A constant supply of
            WHY THE FOCUS                       Organisational diversity                                                     environment to enable                                                     sourcing risk, we need to            amount of waste sent to                                                   change, we need to ensure
                                                                                     corporate citizen we need                                                     to a sustainable food                                                                                       clean water is essential to
            AREAS AND                           and transformation are                                                     employees to thrive. As a                                                create better lives for workers      landfill across our value chain,                                            that appropriate adaptation
                                                                                    to contribute to meeting the                                                system, actively managing                                                                                       our value chain, from the
            MATERIAL ISSUES ARE                  important for enabling                                                     Food retailer, we should                                                    in our supply chain and              and drive a market for                                                    and mitigation actions are
                                                                                   economic and societal needs                                                environmental impacts and the                                                                                    growing of commodities to
            IMPORTANT TO THE                    effective delivery of our                                                   inspire our customers to                                                    contribute to increasing           recycled materials by using                                               taken across our value chain
                                                                                     of the communities where                                                 welfare and dignity of animals                                                                                  the manufacture and sale of
            WHL GROUP                              business strategy.                                                       make healthy choices by                                                     demand for responsibly               them in our operations,                                                    to manage and reduce
                                                                                            we operate.                                                             in our supply chain.                                                                                             our products.
                                                                                                                           providing a wide range of                                                     sourced commodities.               packaging, and products.                                                   energy consumption and
                                                                                                                              healthy food options.                                                                                                                                                                        carbon emissions.

            WHL GROUP GOOD
                                                   Refer to People and             Contribute R3.5 billion to our             Have at least one sustainability attribute for all directly           Responsible sourcing of all key       Phase out single-use plastic            Save 500 billion litres of           Halve our energy impact
            GOALS AND
                                                 Transformation chapter              communities by 2020.                                   sourced products by 2020.                                   commodities by 2020.               shopping bags by 2020.                    water by 2020.                   by 2020 and source all our
                                                                                                                                                                                                                                           All our packaging will be                                                   energy from renewables
                                                                                                                                                                                                                                            reusable or recyclable                                                            by 2030.
                                                                                                                                                                                                                                                    by 2022.

                                                   Refer to People and                                                                                                                                 Progress is varied across                                                                                   Energy impact: Exceeded target
            PROGRESS TO DATE                                                                 On track                                   Progress is varied across the Group                                                                         On track                Water target is being reframed
                                                 Transformation chapter                                                                                                                                    the commodities                                                                                           Renewable energy: On track

                                               Each of our focus areas has specific strategies, management approaches, related goals and targets, all of which are discussed further in this report, along with our performance during the year and any challenges faced.

                     To ensure consistency across our operations, each business unit has a sustainability scorecard against which they are measured twice per annum. This scorecard includes a set of relevant Good Business Journey objectives, targets, and key performance indicators
                         aligned to these eight focus areas and Group goals and commitments. These sustainability scorecards are rolled up to a company level and Group level to assess the performance of the Group against the Good Business Journey goals and commitments.

           WHL 9 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                                                                                           2019 GOOD BUSINESS JOURNEY REPORT / WHL 10
WOOLWORTHS HOLDINGS LIMITED - 2019 Good Business Journey Report - Woolworths Holdings ...
M A N AG I N G                      P E O P LE A N D                     SOCIAL                        H E A LTH A N D                         ETH I C A L                   S U STA I N A B LE                      WA STE                      WATE R                       E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N             D E V E LO PM E NT                  W E LLN E S S                        S O U RC I N G                     FA R M I N G                                                                               C LI M ATE C H A N G E

                   SUSTAINABILITY RISKS
                                                                                                                                                                                           As a fashion, beauty, home, and food retailer, we are faced with sustainability risks that may impact
                                                                                                                                                                                         our business, both in our direct operations and in our value chain. Our response to these risks is managed
                                                                                                                                                                                                                             through our Good Business Journey.

                                                                                                                                                         BRAND REPUTATION
                                                                                                    • Inability to meet stakeholder expectations for reducing and positively influencing environmental and social impacts in our value chain
                                                                                                                            • Inability to meet publicly stated Good Business Journey Group goals and commitments

                                   CLIMATE CHANGE                                                                 WATER QUALITY                                                                         WASTE                                                                    ETHICAL
                                     AND ENERGY                                                                   AND SCARCITY                                                                        TO LANDFILL                                                               SOURCING

            OUR CONCERNS                                                                    OUR CONCERNS                                                                     OUR CONCERNS                                                            OUR CONCERNS
            • Failure to reduce carbon emissions and adapt to and mitigate                 • Food security and food price inflation                                         • Lack of widely available recycling infrastructure and technology      • Increasing expectations for transparency and traceability in the
               against physical climate change impacts                                      • Contamination of available water resources through pollution                   • Availability of cost-effective alternatives                              supply chain
            • Threat to supply and quality of raw materials                                 • Persistent drought                                                             • Balancing the need for packaging to minimise spoilage against        • Increasing requirements to manage third-party social and
            • Food security and food price inflation                                        • Threat to supply and quality of raw materials                                     increasing expectations for packaging reduction                         environmental risk and animal welfare in the supply chain
            • Climate change impacts on seasonality and buying patterns                     • Increasing cost of doing business                                              • Non-compliance with applicable laws and regulations                   • Balancing increasing legislative requirements for supply chain
            • Increasing cost of doing business                                             • Failing infrastructure                                                                                                                                    localisation with the quality, cost, and availability of goods in the
            • Availability of electricity                                                                                                                                                                                                               rest of Africa
            • Failing infrastructure

            RELATED GBJ FOCUS AREAS                                                         RELATED GBJ FOCUS AREAS                                                          RELATED GBJ FOCUS AREAS                                                 RELATED GBJ FOCUS AREAS

             Sustainable Farming             Energy & Climate Change                        Sustainable Farming             Water                                             Waste                                                                  Sustainable Farming            Ethical Sourcing

            MITIGATIONS                                                                     MITIGATIONS                                                                      MITIGATIONS                                                             MITIGATIONS

            • A chievement of 2020 goal to halve our energy impact                         • Implementation of water efficiency initiatives in our direct operations        • C ommitment to achieving our vision of zero packaging waste          • Commitment to responsible sourcing of all key commodities by 2020
            • Commitment to sourcing all energy from renewables by 2030                    • Implementation of Woolworths’ Farming for the Future programme                    to landfill                                                          • Publication by Country Road Group and David Jones of their
            • Implementation of energy-efficiency initiatives in our                       • Implementation of the green factories programme with                          • Phase out of single-use plastic shopping bags and introduction of       supplier lists
               direct operations                                                               Woolworths’ suppliers                                                            low-cost reusable bags                                               • Mandatory compliance by suppliers with our Codes of Conducts
            • Solar photovoltaic installations across the Group                             • Implementation of a detox strategy to remove harmful chemicals                • Proactive stakeholder engagement with the packaging and                 and Good Business Journey-related position statements
            • Implementation of Woolworths’ Farming for the Future programme                   from clothing manufacture                                                        recycling industries                                                 • Sourcing commodities through recognised international certification
            • Implementation of the green factories programme with                         • Involvement in water stewardship projects in key Woolworths                   • Trialling sustainable packaging options                                  and verification programmes
               Woolworths’ suppliers                                                           sourcing regions                                                              • Recycling of waste from direct operations                             • O ngoing training of staff and suppliers on ethical sourcing topics
            • Optimisation of Woolworths’ delivery footprint                                • Product innovation                                                             • Provision of customer takeback facilities at Woolworths stores        • Proactive stakeholder engagement with governments and regulators
                                                                                                                                                                             • Donation of surplus food and clothing to charities
                                                                                                                                                                             • Inclusion of clear on-pack recycling labelling

           WHL 11 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                                                                    2019 GOOD BUSINESS JOURNEY REPORT / WHL 12
M A N AG I N G                      P E O P LE A N D                       SOCIAL                                 H E A LTH A N D              ETH I C A L    S U STA I N A B LE                  WA STE                                         WATE R                                      E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N               D E V E LO PM E NT                           W E LLN E S S             S O U RC I N G      FA R M I N G                                                                                                             C LI M ATE C H A N G E

                                  OUR VALUE CHAIN                                                                                                                                     OUR STAKEHOLDERS
                   As a diversified-product retailer in food, fashion, beauty, and home with a global footprint, we                                                       We engage with our stakeholders and shareholders to understand what matters most to them and how we
                 recognise the significant challenges associated with the complexity of working within a multi-tiered                                                     can deliver a sustainability strategy that allows us to meet their expectations without compromising our
                                              and geographically dispersed supply chain.                                                                                                                       value proposition as a business.

                 Our material issues, risks, and impacts are spread across our entire value chain, which spans from
                              raw material production to customers and the end-uses of our products.                                                                     The WHL Group is committed to                that these engagements facilitate value                                     of stakeholder engagement. Our
                                                                                                                                                                         developing and sustaining quality,           creation so that they are beneficial to                                     stakeholders, their interests, and
                                                                                                                                                                         long-term relationships with all our key     the Group and our stakeholders.                                             level of influence in the Group’s
                                                                                                                                                                         stakeholders, including our employees,       The Board is committed to stakeholder                                       operations will vary according to
                                                                                                                                                                         customers, suppliers, communities,           engagement with the interactions,                                           geographical location, business
                                                                       OUR VALUE CHAIN                                                                                   business partners, unions, NGOs,             monitoring and implementation of                                            area, and the nature of their interest;
                                                                                                                                                                         academia, industry bodies, government,       stakeholder engagement being                                                the manner, level and extent of our
                                                                                                                                                                         regulators, and the media, among             the responsibility of respective                                            engagements are driven by their
                                                                                                                                                                         others. Our stakeholder relationships        management teams in the Group. The                                          influence, interests, expectations, and
                                                                                                                                                                         help foster an environment that helps us     Social and Ethics Committee annually                                        concerns. These relationships are
                                                                                  Environment                                                                            build on the growth and prosperity of        reviews the Group’s self-assessment                                         depicted in the graph below.
                                                                                                                                                                         our Group. Our philosophy is to engage
                                                                                                                                                                         authentically, openly and inclusively with
                                                                                                                                                                         our stakeholders, allowing us to better
                                                                                                                                                                         understand and benefit from their                                                                                             Shareholders                    Customers

                                                                                                                                                                         insights, concerns, and priorities and to                                                                                                            Debt Funders
                               Components                                                                                                                                seek areas of potential partnerships,
                                                         Agriculture      Suppliers & Processors    WHL operations              Customers                                mitigate risks to the business, and                                                                                  Government
                                                                                                                                                                                                                                                                                              and Regulators               Suppliers
                                                                                                                                                                         create mutual trust and respect.                                                           Media

                                                                                                                                                                                                                      Level of influence
                                                                                                                                                                         This is integral to the ongoing, daily                                 Business Partners
                                                        Raw material           Processing                 Buying                Purchasing                               management of the Group and key
                                                                               Production          Logistics/distribution    Market influence                            to identifying the material issues that                                            Competitors
                                 Function                                                                                                                                                                                                                                                                             NGOs and Activists
                                                                               Packaging                 Retailing           Use and disposal                            have the potential to significantly                               Unions

                                                                                                                                 of goods                                impact our performance and                                                                                                         Industry Bodies
                                                                                Auditing              Core business
                                                                                                        functions                                                        sustainability. We ensure our
                                                                                                                                                                         engagements are based around issues                                                                                                                           Communities

                                                                                                                                                                         that are both salient for the business
                                                                                                                                                                         and aligned to national priorities, and
                                                                                                                                                                                                                                                                            Level of interest in WHL activities

           With an understanding of our value chain, we are able to adopt a systems-thinking-based approach to addressing our
           material issues and risks. We demonstrate in each chapter of this report where in our value chain each of our eight Good                                      In the appendices to this report, a full table is included where we have listed our key stakeholder groupings; their material
           Business Journey focus areas and related material issues and risks is relevant.                                                                               needs, expectations, and concerns; and how we create value for them.

                 Read more on the supply chain in the Ethical Sourcing chapter                                                                                               See Stakeholder Engagement

           WHL 13 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                                                                                       2019 GOOD BUSINESS JOURNEY REPORT / WHL 14
M A N AG I N G                      P E O P LE A N D                SOCIAL              H E A LTH A N D      ETH I C A L                       S U STA I N A B LE      WA STE                     WATE R                      E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N        D E V E LO PM E NT        W E LLN E S S     S O U RC I N G                         FA R M I N G                                                             C LI M ATE C H A N G E

                                                                                                                                                                                        Q U I C K ACC E S S TO S ECTI O N S

    TRANSFORMATION                                                                                                                                                                 17
                                                                                                                                                                             OF RESULTS
                                                                                                                                                                                                                       STRATEGY &

                                                                                                                                                                                                                   MANAGEMENT APPROACH

                     “Central to who we are as a Group is our commitment to our
                    customers and our people. Therefore, our focus on our people is                                                                                                19                                            23
                        at the forefront of driving a successful Group strategy.”                                                                                        TALENT DEVELOPMENT
                                                                                                                                                                            AND RETENTION
                                                                                                                                                                                                                  DIVERSITY, AND INCLUSION

                                                   – Melanie Naidu, Group Head of Human Resources

                                                                                                                                                                         TRANSFORMATION IN
                                                                                                                                                                          THE SUPPLY CHAIN

           WHL 15 / 2019 GOOD BUSINESS JOURNEY REPORT                                                        Azania Mqayi at the Woolworths Palmyra store coffee cart.                                                                2019 GOOD BUSINESS JOURNEY REPORT / WHL 16
M A N AG I N G                      P E O P LE A N D                SOCIAL               H E A LTH A N D               ETH I C A L    S U STA I N A B LE                 WA STE                           WATE R                    E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N        D E V E LO PM E NT         W E LLN E S S              S O U RC I N G      FA R M I N G                                                                            C LI M ATE C H A N G E

                                                     SUMMARY                                                                                         STRATEGY AND
                                                    OF RESULTS                                                                                   MANAGEMENT APPROACH
                                                             Group Employee Headcount                                                            STRATEGY                                                        Woolworths SA CEO, was established in 2016 as a
                                                                                                                                                                                                                 vehicle to deliver a modern and connected people
                                                                                                                                                 The Vision of WHL is to be one of the world’s most
                                                                                                                                                                                                                 experience to our employees. As part of this,
                                                                                                                                                 responsible retailers. This vision reflects our deep
                                                                                                                                                                                                                 Woolworths South Africa launched refreshed values in

                                                              46 831
                                                                                                                                                 commitment to doing good business for our customers,
                                                                                                                                                                                                                 2017, and we continue to engage across the business to
                                                                                                                                                 our employees and our planet. Our Group purpose of
                                                                                                                                                                                                                 ensure that every employee understands the role they
                                                                                                                                                 adding quality to life for our customers and our people is
                                                                                                                                                                                                                 play in bringing these values to life. In the last year, we
                                                                          WHL                                                                    reflected by the fact that our commitment to our customers
                                                                                                                                                                                                                 also successfully piloted an employee app called
                                                                                                                                                 and our people is central to who we are. Our Group
                                                                                                                                                                                                                 ‘MyWoolies’ as part of building a modern and connected
                                                                                                                                                 people strategy ensures that we create a unique employee
                                                                                                                                                                                                                 culture in the business.
                                                                                                                                                 experience to deliver an exceptional customer experience.
                                                                                                                                                 We have regional people strategies with Group oversight
                                                                                                                                                 and through this, we are able to deliver this compelling        IN AUSTRALIA, OUR REGIONAL PEOPLE STRATEGY IS
                                                                                                                                                 value proposition.                                              ACHIEVED THROUGH ENSURING THAT WE ENCOURAGE:

                 33 621    Woolworths
                                                                5 601
                                                                Country Road Group
                                                                                                   7 609David Jones
                                                                                                                                                 As a Group, it is important for us to ensure that we employ
                                                                                                                                                 and invest in people who share our purpose and values
                                                                                                                                                 and have the capability to grow the business into the future.
                                                                                                                                                                                                                 • A
                                                                                                                                                                                                                    more integrated and sophisticated approach to culture,
                                                                                                                                                                                                                   values, talent development, succession management,
                                                                                                                                                                                                                   leadership development, team member experience, and
                                                                                                                                                 To this end, it remains critical that we embed and drive an       employee relations
                                                                                                                                                 Employee Value Proposition that will continue to attract,       • Inclusivity and diversity through making sure that
                                                                                                                                                 engage, and retain the best, diverse talent required to            our employees are given a voice. The first regional
                                                                                                                                                 deliver our Group strategy.                                        engagement survey was implemented for David Jones
                                                                                                                                                 Our Group people strategy is, therefore, sharply focused           and Country Road Group. This is aligned to the regional
                                                                                                                                                 on ensuring that we create an environment in which our             people strategy of focusing on understanding workplace
                                  Woolworths Supplier and Enterprise                                                                             people can thrive and add value to the business.                   culture in order to build an inclusive workplace
                                      Development programme                                                                                                                                                      • A
                                                                                                                                                                                                                    dding value so our customers, our people, our partners,
                                                                                                                                                                                                                   and our communities know what we stand for through a
                                                                                                                                                                                                                   shared values roll-out
                                                                                                                                                                                                                 • Building a culture of collaboration

                                                                                                                                                 MANAGEMENT APPROACH
                                                                                                                                                 Our values inform and underpin the way we do business
                                                                                                                                                 across the Group. We have continued to entrench a
                                                                                                                                                 values-based culture across all our operating entities as             IMPACT IN THE VALUE CHAIN
                                                                                                                                                 an anchor for our brand, our people and customer

                                                             R308.4M                                                                             experiences, and, ultimately, as a key contributor to our
                                                                                                                                                 organisational sustainability into the future.                               Communities

                                                                                                                                                                                                                              Environment                 WHL
                                                         Procurement spend with supplier                                                         In conjunction with this, building future-focused                            Economy

                                                            development beneficiaries                                                            capabilities among our leadership remains a key priority
                                                                                                                                                 throughout the Group to enable sustainability of our
                      SED beneficiaries                                                                                                                                                                                                                   Suppliers &
                                                                   2018: R246M                                                                   values-based culture.                                                        Customers                   Processors
                            2018: 49                                2017: NR*                         Youth appointed                            In South Africa, the Connected People Council, a
                            2017: 48                                *not reported in 2017              at Woolworths                             collective forum of senior executives chaired by the

           WHL 17 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                         2019 GOOD BUSINESS JOURNEY REPORT / WHL 18
M A N AG I N G                      P E O P LE A N D                 SOCIAL                       H E A LTH A N D               ETH I C A L    S U STA I N A B LE                      WA STE                                WATE R                           E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N         D E V E LO PM E NT                 W E LLN E S S              S O U RC I N G      FA R M I N G                                                                                             C LI M ATE C H A N G E

                  TALENT DEVELOPMENT
                     AND RETENTION
           Having the best talent in the industry        We understand that attracting,
           in the regions in which we operate is         developing, and retaining talented
           key to our success. At the same time,         employees is critical to delivering
           competition for talented employees is         our strategy and, therefore, we                                                                           CASE STUDY
           intensifying. Talent development, talent      remain passionate and committed
           management, and succession planning           to sustainable transformation and
                                                                                                                                                                  YOUTH EMPLOYMENT SERVICE (YES): WOOLWORTHS SOUTH AFRICA
           are, therefore, vital. Our integrated         steadfast in our belief that skills                                                                      Woolworths is committed to making a difference in South Africa and has been involved in making a
           and streamlined talent management             development is a key enabler of this.                                                                    difference through education by participating in various initiatives like internships, graduate programmes,
           and succession planning engagement            We are also clear in that delivery                                                                       career exhibitions, and work experience opportunities for unemployed youth and people with disabilities. In
           sessions and processes have allowed           of transformation through skills                                                                         March 2018, we became one of the companies partnering with YES (Youth Employment Services) – a CEO-led
           us to focus on talent across the Group        development requires us to extend                                                                        government initiative launched by President Cyril Ramaphosa aimed at providing one million youth with work
           in a more focused and impactful               beyond skills development within the                                                                     experience and helping them gain valuable skills. In the last year, we have collaborated closely with YES and
           manner, with the appropriate level            Group, and includes us playing a                                                                         a number of external partners to build an understanding of how to implement YES within the Woolworths
           of strategic oversight. In addition,          role in enabling education, capacity               The Woolworths HR                                     environment. Participating in YES has also offered us the opportunity to place learners in entry-level roles and
           our continued focus on leadership             building, and skills development               Learning and Development                                  to build a pipeline of ready-now skilled people for core/scarce roles.
           development to build leaders now and          targeted at improving the employability         team was named the best                                  YES employees have been inducted at various Woolworths facilities across the country. At stores, our
           into the future is part of creating an        of graduates from various institutions.          HR team in South Africa                                 YES employees will be rotated around the store at approximately three monthly intervals to ensure they
           environment that attracts, develops           This, ultimately, improves the calibre of      for 2018 by the Institute of                              experience the complete retail life cycle. They will attend functional and technical training specific to their
           and retains the best talent.                  our future talent pipeline.                        People Management                                     job role and will attend life skills and financial wellness workshops. Each head-office-based employee will
                                                                                                                                                                  receive a personal development plan based on their specific role, which ranges from visual merchandiser to
                                                                                                                                                                  marketing assistant and graphic designer.
                                                                   Training spend                                                                                 Approximately 450 young people have been offered this opportunity through Woolworths to date.

              R121.6M      Woolworths
                                                                 Country Road Group
                                                                                                            R9.4MDavid Jones

           Given that our business model depends on specialist skills which are not always readily available in the market, skills
           development is a key anchor for our talent strategy as well as our employment equity and diversity strategies. Within
           Woolworths South Africa, the focus is on human capital transformation, specifically employment equity and skills                                 Woolworths YES employees. From left to right: Nadine Poggenpoel, Lungisa Mjanyelwa, Tara Louw, Warren De Kock, Yonela Gozini,
                                                                                                                                                            Anastacia Hendricks, Terri Groenewald.
           development, and we build skills for the company and the country.

           WHL 19 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                                                    2019 GOOD BUSINESS JOURNEY REPORT / WHL 20
M A N AG I N G                      P E O P LE A N D               SOCIAL                      H E A LTH A N D                     ETH I C A L    S U STA I N A B LE                  WA STE                             WATE R                  E N E RGY A N D
S U STA I N A B I LIT Y            TR A N S FO R M ATI O N       D E V E LO PM E NT                W E LLN E S S                    S O U RC I N G      FA R M I N G                                                                             C LI M ATE C H A N G E

           THE A+ FINANCE                                    TALENT DEVELOPMENT IN AUSTRALIA                                                                 INDUSTRY-BASED WORKPLACE EXPOSURE
           ACADEMY: WOOLWORTHS                               One of the key challenges highlighted in 2019 was the need to have a
           SOUTH AFRICA                                      consistent approach and view of talent across the Group. In addressing                          SOUTH AFRICA                                                      AUSTRALIA
           Aspiring chartered accountants are                this, the key focuses for 2019 have been to optimise and streamline the
                                                                                                                                                             Annually, we offer opportunities ranging from bursaries           Witchery collaborates with the RMIT University in Melbourne
           now able to complete their three                  talent and succession process to ensure that talent engagement sessions
                                                                                                                                                             for students to co-op student placements, workplace               to offer a work placement programme for selected visual
           years of articles at Woolworths. The              are objective, strategic, and outcomes driven. Embedding a culture of
                                                                                                                                                             experience programmes for Sector Education and Training           merchandising students. Country Road offers 12-month
           Woolworths Finance Department, as                 regular talent discussions that are owned and prioritised by the leaders
                                                                                                                                                             Authority (SETA) unemployed graduates, through to job             graduate positions for students to be mentored by Country
           part of an initiative undertaken by               of the organisation remains central to the people strategy. We have also
                                                                                                                                                             placement. In the last year, we offered 251 employee              Road’s visual merchandising team.
           the A+ Finance Academy, has been                  continued rolling out the values conversations throughout the organisation
                                                                                                                                                             dependent bursaries amounting to R5 million. We also
           accredited by the South African Institute         as a priority.
                                                                                                                                                             hosted 102 co-op students for workplace experience,
           of Chartered Accountants (SAICA) as a                                                                                                             57 of whom were employed thereafter on long-term
           Training Outside of Public Practice (TOPP)                                                                                                        contracts of at least 12 months.
           training office. This is a realisation of our
           Finance People Strategy to grow our                                                                                                               Through the Woolworths’ Inside Retail programme, we               REMUNERATION
           own talent and provides an opportunity                                                                                                            collaborate in developing TVET college lecturers’ capacity        The Group‘s remuneration philosophy is to ensure
           for our own people who desire to forge            LABOUR TURNOVER                                                                                 by providing them with industry-based workplace                   that employees are rewarded appropriately for their
           careers as chartered accountants,                                                                                                                 exposure. Last year, 29 lecturers were immersed for five          contribution to the execution of the Group strategy.
                                                             The labour turnover rate for WHL was 21.2% (WSA: 20.6%; DJ: 24.4%;
           to do their qualifying articles without                                                                                                           days in the dynamic world of retail, which then translates        An integral component of the Employee Value Proposition,
                                                             CRG: 21.7%) including stores, corporate offices and supply chain, an
           having to leave the business. In addition,                                                                                                        into more up-to-date and relevant content being shared            the Remuneration Policy has been designed so that it
                                                             overall decrease of 3.4% from last year.
           employees who may not have had                                                                                                                    with their students. (This excludes the SETA-funded lecturer      will continue to attract, engage, retain, and motivate
           the opportunity to complete tertiary                                                                                                              development programme where we hosted 24 lecturers                the right, diverse talent required to deliver sustainable
           studies will now be able to complete a                                                                                                            over five days at no additional expense to us.)                   profit growth.
           Learnership through Woolworths Finance
           to obtain their NQF 3 Level Accounting
           Technician South Africa Certificate.
                                                                   21.2%    WHL
                                                                                                            Country Road Group
                                                                                                                                                                                                                               The Remuneration Policy is designed to achieve alignment
                                                                                                                                                                                                                               between the Group‘s business strategy and the behaviours
                                                                                                                                                                                                                               of all employees against the values of the Group. The
           The qualification is the South African                                                                                                                                                                              policy recognises and rewards individual responsibility,
           Institute of Chartered Accountant’s                                                                                                                                                                                 performance, and behaviour in the achievement of the

           entry- to mid-level designation that                         2018: 24.7%                               2018: 23%                                                                                                    business areas’ goals. This policy applies to all Group
           helps learners move from being unskilled                     2017: 25.5%                              2017: 27.3%                                                                                                   employees, and participation in short- and long-term
           and unqualified to being respected                                                                                                                                                                                  incentive schemes is dependent on an individual‘s role and
           accountancy professionals. Both these                                                                                                                      co-op students on learnerships                           level within the Group.
                                                                                                                                                                              at Woolworths

           programmes enable employees to

                                                                                                                                                                                                                               The Remuneration Policy and the implementation thereof
           develop the relevant skills for accounting                                                                                                                                                                          are focused on achieving a fair and sustainable balance
           competency in the workplace.                                                                                                                                                                                        between guaranteed pay, short-term incentives, long-term
                                                                        Woolworths                               David Jones                                                                                                   incentives, and retention schemes for these employees. The
                                                                                                                                                                                                                               fair and responsible application of the Remuneration Policy
                                                                          2018: 23%                                 2018: 33%                                                                                                  (on a Group-wide basis) is guided by the King IV™ principles
                   Woolworths has been
                                                                                                                                                                                                                               relating to fair and responsible remuneration, which have

                 accredited by the South                                 2017: 23.7%                              2017: 31.8%
                                                                                                                                                                                                                               been adopted by the WHL Group.
              African Institute of Chartered
             Accountants (SAICA) as a TOPP
              training office for prospective                                                                                                                         worth of employee dependent
                  Chartered Accountants                                          See Group Employee Information                                                             bursaries offered                                        See Remuneration Report

           WHL 21 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                                     2019 GOOD BUSINESS JOURNEY REPORT / WHL 22
M A N AG I N G                     P E O P LE A N D               SOCIAL                     H E A LTH A N D                  ETH I C A L    S U STA I N A B LE                    WA STE                            WATE R                       E N E RGY A N D
S U STA I N A B I LIT Y           TR A N S FO R M ATI O N       D E V E LO PM E NT               W E LLN E S S                 S O U RC I N G      FA R M I N G                                                                                   C LI M ATE C H A N G E

           WHL is committed to respecting human rights, which includes        EMPLOYMENT EQUITY                                                         PEOPLE LIVING WITH DISABILITIES
           ensuring that all employees and others connected with our          Employment equity remains a key focus of the Group’s                      Through BBBEE legislation, the Department of Trade and Industry (dti) has recommended a target that 2% of
           business are treated with dignity and respect. We value            transformation agenda for Woolworths South Africa.                        the company workforce be black people with disabilities. In South Africa, our strategic approach to people
           diversity and inclusion and are committed to non-sexism and        Currently, historically disadvantaged South Africans (HDSA)               with disabilities is aligned with our people and transformation strategies and the national skills development
           non-racism across our policies, practices, and daily operations.   represent 95.8% of total Woolworths permanent employees,                  strategy. The implementation of this strategy is being carried out in partnership with the Wholesale and
           It is important for us as a Group to continue to focus on our      of which 62.1% are in middle to top management positions.                 Retail SETA. We currently have 569 people with disabilities (2018: 638) working for Woolworths.
           transformation initiatives and evolve them so that we are          Women represent 64% of HDSA permanent employees.
           experienced as a truly transformed employer. Ensuring we           We have 12 HDSA members at top management in
           have a workplace and environment where all our employees           Woolworths SA, comprising executive directors on the
           feel welcomed, where they believe and know they are                Board and members of the executive committee. Of these,
           treated fairly and are not discriminated against, is a critical    54.4% are black and 45% are female, with 27.3% being
           part of creating an environment where our people can thrive        black female.                                                             TRANSFORMATION, DIVERSITY, AND INCLUSION IN AUSTRALIA
           and be part of growing a sustainable business.                                                                                               In Australia, transformation focuses on supporting Aboriginal and Torres Strait Islander peoples, including those currently
           In addition to our overarching commitment to transformation,                                                                                 working for the business and those seeking employment, as well as customers. Compulsory Equal Employment Opportunity
           diversity, and inclusion, each region has a key focus for                                                                                    (EEO) training is completed by all new employees to increase awareness of these issues, and David Jones has implemented
           transformation that is determined by the context and                                                                                         a Reconciliation Action Plan.
           environment in which it operates. As a Group, we continue
           to support these region-specific strategies. Gender parity

           remains a focus across the Group.                                                                                                            EMPLOYMENT EQUITY AND GENDER EQUALITY IN AUSTRALIA
                                                                                                                                                        Both Country Road Group and David Jones are committed to equal opportunity in the workplace for all regardless of age,
                                                                                                                                                        career status, disability, industrial activity, physical features, political belief or activity, pregnancy, race, religion, gender, or sexual
                                                                                        HDSA breakdown of Woolworths                                    preference. The two companies adhere to the Workplace Gender Equality Agency compliance-based report, based on the
                                                                                            permanent employees                                         2012 Gender Equality Act of Australia, and have submitted annual reports detailing female representation in the workplace for
                                                                                                                                                        FY2019 as:
           In South Africa, we are all tasked with implementing a                                                                                                                                            Proportion of women:
           workplace Black Economic Empowerment (BEE) strategy,
           in response to the national Broad-Based Black Economic
           Empowerment (BBBEE) legislation, including the application
           of the BEE Codes of Good Practice of 2013. Within this
           context, in Woolworths South Africa, the focus from a people
           perspective is on human capital transformation, specifically
           Employment Equity and Skills Development.
           Compliance with BEE legislation ensures that Woolworths
           continues to contribute meaningfully towards national priorities
           to transform the industries in which we operate, to make the
           economy more inclusive. For the 2018 financial year, Woolworths
                                                                                     36% male
                                                                                                                                                                            Country Road Group
                                                                                                                                                                                                                                                        David Jones
           attained a Level 7 contributor level as independently assessed
           in September 2018 (assessment conducted in arrears).

                See 2018 BEE Certificate                                                  See Group Employee Information                                                                                     See Group Employee Information

           WHL 23 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                                       2019 GOOD BUSINESS JOURNEY REPORT / WHL 24
M A N AG I N G                     P E O P LE A N D                    SOCIAL              H E A LTH A N D                              ETH I C A L                           S U STA I N A B LE       WA STE   WATE R      E N E RGY A N D
S U STA I N A B I LIT Y           TR A N S FO R M ATI O N            D E V E LO PM E NT        W E LLN E S S                             S O U RC I N G                             FA R M I N G                            C LI M ATE C H A N G E

                                                                                                                                                                                                                                EMPLOYEE ENGAGEMENT
                                                                                                                                                                                                                                We recognise that our people
                     CASE STUDY                                                                                                                                                                                                 are one of our key stakeholders in
                                                                                                                                                                                                                                building a sustainable business and,
                    DAVID JONES RECONCILIATION                                                                                                                                                                                  as such, our strategic intent is to
                    ACTION PLAN (RAP)                                                                                                                                                                                           build a culture of ongoing leader-led
                                                                                                                                                                                                                                engagement. In addition, in each
                    As one of Australia’s oldest companies, David Jones has recognised                                                                                                                                          of the entities we regularly conduct
                    the role they can play in promoting reconciliation between                                                                                                                                                  company-wide employee opinion
                    Australia’s First Nations peoples and the broader community.                                                                                                                                                surveys to inform our understanding
                    The David Jones Reconciliation Action Plan (RAP) was launched to                                                                                                                                            of how our people experience
                    inform the strategic and operational management framework for                                                                                                                                               working for us, how we measure
                    their approach to bridging actual and perceived gaps between                                                                                                                                                against their expectations, and
                    Aboriginal and Torres Strait Islander peoples and non-indigenous                                                                                                                                            where we can improve. In this past
                    employee and customer communities. The core tenants of this plan                                                                                                                                            financial year, Country Road Group
                    are focused on:                                                                                                                                                                                             and David Jones launched the Shape
                    • N urturing mutually beneficial relationships with Aboriginal                                                                                                                                             Our Culture regional survey. The
                       and Torres Strait Islander communities, peoples and                                                                                                                                                      participation rate was 58% with an
                       organisations, to ensure that our contribution towards                                                                                                                                                   overall engagement score of 66%.
                       reconciliation is made in a culturally safe manner that helps
                       to create meaningful change
                                                                                                                                                                                                                                UNION MEMBERSHIP
                    • P romoting and celebrating the richness of Aboriginal and
                       Torres Strait Islander cultures, values, and histories in a manner                                                                                                                                       As a signatory to the United Nations
                       that respectfully connects our employees and customers with                                                                                                                                              Global Compact, we subscribe to
                       Aboriginal and Torres Strait Islander communities                                                                                                                                                        freedom of association and the
                                                                                                                                                                                                                                effective recognition of the right to
                    • E nsuring that Aboriginal and Torres Strait Islander peoples and                                                                                                                                         collective bargaining. This is also
                       businesses have access to the same opportunities as non-                                                                                                                                                 translated in our Supplier Codes
                       indigenous people and businesses                                                                                                                                                                         of Conduct across the Group. In
                    • T racking progress and reporting with the goal of establishing a                                                                                                                                         2019, Woolworths union membership
                       solid baseline and then reporting how we are tracking against                                                                                                                                            was 2.86% (2018: 3.33%).
                       our RAP commitments to ensure that the same discipline and
                       governance that applies to our Good Business Journey applies
                       to the management of our RAP
                    A RAP working group has been established to implement the
                    various elements of the plan. This plan is the foundation for a future
                    regional plan, inclusive of WHL Australia, and going forward, we
                    will be rescoping to regionalise it for increased scale and impact.

                          See David Jones Reconciliation Action Plan 2018 – 2020

                                                                                             Children celebrating the richness of Aboriginal and Torres Strait Islander cultures, values and histories.

           WHL 25 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                               2019 GOOD BUSINESS JOURNEY REPORT / WHL 26
M A N AG I N G                     P E O P LE A N D                 SOCIAL                 H E A LTH A N D              ETH I C A L    S U STA I N A B LE                   WA STE                           WATE R                      E N E RGY A N D
S U STA I N A B I LIT Y           TR A N S FO R M ATI O N         D E V E LO PM E NT           W E LLN E S S             S O U RC I N G      FA R M I N G                                                                                C LI M ATE C H A N G E

                       TRANSFORMATION IN
                        THE SUPPLY CHAIN
           As a contribution to the broader country vision
           of inclusive economic growth and a Woolworths’                                                                                                 CASE STUDY
           commercial imperative of building a diverse
           supplier base, Woolworths has a Supplier                                                                                                       HEADBYTE RETAIL
           and Enterprise Development (SED) programme.
                                                                                                                                                          In June 2018, in a focused initiative to build local skills and support the development of a small-to-medium
           The programme intent is to remove barriers
                                                                                                                                                          enterprise, Woolworths entered into a three-year Supplier Development agreement with Headbyte Retail.
           for emerging black and black women-owned
           businesses to enter into our supplier base. At the                                                                                             Headbyte Retail is a 100% black-owned company which offers expert skills and services specialising in
           heart of it is the unlocking of market opportunities                                                                                           enterprise application and technology solutions. They aim to help people grow and businesses to succeed,
           for small and medium black and black women-                                                                                                    and consist of a group of senior technical resources who have a proven track record of providing specialist
           owned enterprises and further providing capital                                                                                                skills and support in technologies that Woolworths relies on to do day-to-day business. The ethos and motto
           and relevant capacity building to deliver to                                                                                                   of Headbyte Retail resonates with Woolworths’ values and the IT strategic objective of building a retail
           supplier expectations. Woolworths is on a                                                                                                      technology centre of excellence.

                                                                            46                        R2.7BN
           purpose-led journey to transform entrepreneurial                                                                                               The Woolworths team, spanning Transformation Office, Governance, IT Leadership and Management,
           passion and energy into sustainable, local, black                                                                                              Finance, Legal, and HR supported Headbyte by facilitating partnership agreements with best-of-breed
           businesses absorbed in our supply chain. In the                                                                                                partners, helping define the business operating model, and constituting a steering committee to mentor
           financial year under review,                                suppliers on the                in revenues contributed                            and guide Headbyte’s business development.
           • We contributed over R2 billion towards                Supplier and Enterprise               to black and black                              Headbyte Retail is a proud BBBEE Level 1 contributor to South African businesses with a strong CSI presence
              revenues of small and medium enterprises             Development programme               women owned suppliers                              through various academic and developmental initiatives.
              participating in our supplier base                                                                                                          Thanks to the partnership agreement, Headbyte Retail was able to secure international work
           •	We contributed R2.7 billion in revenues to                                                                                                  opportunities and to offer similar services to other retailers, thereby supporting the joint vision of local
              black and black women-owned suppliers                                                                                                       skills development.
              in our supplier base                                                                                                                        Over the past year, Headbyte Retail has grown by 62.5% with respect to headcount and over the coming
           •	The 46 beneficiaries of our SED programme                                                                                                   years aims to employ up to 50 people.
              have grown from a total revenue of R246 million
              at the beginning of the period to R293 million
              by year end as a result of tailor-made support
              provided by Woolworths and its partners
           After more than 10 years on this journey,
           Woolworths prides itself in ongoing learnings
           from the successes and failures of small
           businesses in different sectors of the economy.
           All these learnings are being consolidated                                                                                               LOOKING AHEAD: PEOPLE AND TRANSFORMATION
           into a future programme that will step up our
           contribution to inclusive and sustainable
           economic growth through small, medium and                                                                                              It is important for us a Group to continue to focus on our transformation initiatives and evolve these so that we are

                                                                    R2BN+                             R60.5M
           micro enterprises (SMME) development in the                                                                                            experienced as a truly transformed employer.
           new year.                                                                                                                              Within this context, the Group will continue to embed our shared values and focus on leadership development to enable an
                                                                                                                                                  inclusive culture that is appreciative of diversity. In addition, as a Group, we will continue to support the regions to identify
                                                                      towards revenues of                 non-cash grant to                       transformation opportunities and implement region-specific transformation strategies, with a particular focus in South Africa
                See 2018 BEE Certificate                               participating SMEs                 The Clothing Bank                       being the new BEE codes.

           WHL 27 / 2019 GOOD BUSINESS JOURNEY REPORT                                                                                                                                                                                             2019 GOOD BUSINESS JOURNEY REPORT / WHL 28
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