SURVEY ON EMAS CERTIFIED COMMERCIAL SITES AND SUSTAINABILITY TRENDS IN THE RETAIL SECTOR

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SURVEY ON EMAS CERTIFIED COMMERCIAL SITES AND
SUSTAINABILITY TRENDS IN THE RETAIL SECTOR
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Commerce in the EU

• Interface between industry and the EU 370 million
  consumers / citizens
• 13 of EU GDP 4.7 million entreprises
• 22.5 million workers from all parts of society

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EuroCommerce

• Representation of the Retail, Wholesale and
  International Trade sectors to the EU
  institutions
• Members in 24 Countries from
• National federations (7 from the Accession
  countries)
• Individual companies
• European sectorial trade associations
• A recognised social partner in European Social
  Dialogue for Commerce

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EuroCommerce (cont)

• Our mission
• Promote and defend the interests of Commerce
  towards the European Institutions
• - Explain as much as Lobby
• Raise the visibility of Commerce to reflect the
  importance of the sector in the European economy
• Inform members of EU developments

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Scope of the surveY

• The questionnaire has been sent to 60 registered
  EMAS wholesalers/retailers companies
• We received 23 answers back.
• Main countries represented Germany but also
  Sweden, Denmark, Austria and Spain
• 14 Large retailers none are EMAS certified, 5
  are ISO 14001 certified (Auchan, Marks Spencer,
  SOK corporation, Sainsbury PLC, CA and Kesko)

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What fields of activity are represented?
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Why did you not choose ISO 14001?
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What is the cost to receive EMAS certification?
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CONCLUSION

• Environmental issues are a widespread concern
  among customers and entrepreneurs
• Many SMEs implemented the EMAS management system,
  and not only large companies
• EMAS registration is mostly considered as a
  beneficial policy to implement
• Large distributors are really expecting their
  suppliers to implement the EMAS management
  system, despite they dont necessarily implement
  it themselves

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Sustainability and the retail sector

• Since the early nineties, large retailers have
  been reporting on their environmental issues.
  Then, they included the social dimension to the
  environmental report.
• Now, the trend is that large retailers publish
  sustainability reports with indicators generally
  elaborated by themselves. (comparability between
  two retailers reports)
• In 2002 two retailers issued a sustainability
  report based on some of the GRI Guidelines
  (Carrefour, Kesko) . We will study those two as
  being representative of the sector. This does not
  discard the other reports which are also relevant.

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Carrefour Reporting System

• Improving the reporting system by identifying
  relevant performance indicators
• The group reviewedEthical rating agency
  questionnaireThe new French Economic Regulation
  making environmental and societal reporting
  compulsory for listed companiesThe GRI
  guidelinesThe goals set out in the first
  Sustainability ReportThe indicators used by
  other companies in the retail sector to
  facilitate comparison of the Carrefour
  performance with that of their competitors

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Carrefour Reporting System (cont.)

• in 2002, 21 countries participated in the Group
  reporting
• Identification of Key performance indicators
  (KPIs)1. Consolidated sales excluding VAT and
  net income from recurring operations after
  goodwill2. Number of countries completing the
  Group sustainable development reporting3. Number
  of purchase offices that use the Groups Quality
  Scoreboard4. Number of stores audited on the
  Groups hygiene and quality standards.5. Energy
  consumption/sales area6. Water consumption/sale
  area7. Water treatment ( recycled)

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Carrefour Reporting System (cont)

• 8. Share of women in management positions9.
  Number of supplier facilities audited on social
  issues10. Number of days of training per
  employee, per year11. Number of Carrefour
  Quality Line products12. Number of organic or
  ecological products
• The Carrefour report is based on some of the
  performance indicators of the GRI (see copy)

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Carrefour awards for its 2002 Sustainable Report

• Carrefour was listed on the Dow Jones
  Sustainability Index for the first time
• Carrefour has qualified for the first time to
  Storebrand Principle Funds portfolio of ethical
  companies by Storebrand, Scandinavias leading
  ethical funds manager

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Carrefour policy with suppliers

• 15 countries includes a code of ethics in the
  employment contract of purchasers
• Carrefour promote partnership with SMEs entering,
  among other things, into long terms commitments
  In France the commitment contract strengthens
  the business co-operation with 255 SMEs through
  mutual commitments
• Carrefour works in close partnership with their
  supplier for their own brand products. They set
  up a product safety programme for its controlled
  products
• Carrefour encourages their suppliers to put in
  place an Environmental Management System (EMS)
  even providing some financial aid for that.

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Carrefour packaging design policy

• The Group compiled a guide to packaging
  conception, to disseminate best practices
  throughout the Group. It defines the essential
  features of packaging including environmental
  criteria.
• In 2002, Carrefour France saved 484 tonnes of raw
  material (a total of 4 500 tonnes since 1996)
• It launched two projects to existing material
  reduction initiatives a GMO free vegetal ink for
  use in paper and cardboard packaging and a new
  ecological limestone-based material to wrap own
  brand butter

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Carrefour labelling

• Carrefour buys FSC certified roble
• Silver Sea private label for the purchase of fish
• Filière qualité de carrefour

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Carrefour Social Commitments

• Carrefour developed a Social Commitment Charter
  whereby it enforces basic workers right as laid
  down by the ILO, I.e., eradication of slave
  labour, a ban on employing children under the age
  of 14, etc
• Carrefour created the INFANS association in
  partnership with the International Federation of
  Human Rights whose role is to monitor social
  risks, carry out spot checks and identify local
  NGOs able to oversee the roll-out of Carrefours
  initiative out in the field

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Conclusions

• Economic pillar goals1. Make quality products
  available to the greatest number of people2.
  Guarantee balanced trade3. Pay grower a fair
  price4. Develop long-term relations with local
  partners5. Promote international trade
• Societal pillar goals1. Uphold human rights,
  especially those of children2. Help maintain
  local jobs3. Ensure consumer health and
  safety4. Promote the sharing of know-how

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Conclusions (cont)

• Environmental pillar
• 1.Preserve the environment by limiting the
  negative impact of Carrefours Quality Lines
• 2. Preserve bio-diversity
• 3. Conserve natural resources
• 4. Manage waste

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Kesko

• Kesko is Finlands leading trading sector
  marketing and logistics company
• Kesko fully owns its subsidiaries Kesko Agro,
  Kesko Food (55 of Kesko net sales), Rautakesko
  and Keswell are responsible for store sites,
  purchasing, logistics, marketing and chain
  co-operation with the respective K-retailers.

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Kesko Reporting System

• The Kesko report follows closely the GRI
  guidelines but not 100
• GRI Environmental indicators not used in the
  Kesko report1.Specifications of supplier
  practices2. Information on land-ownership and
  its impacts3. Fuel consumption statistics4.
  Indicator typical of industrial activities5.
  Detailed environmental analysis of water use
• GRI economic indicators not used in the Kesko
  report1. The value of research and
  development2. Wages and benefits have not been
  given by country3. An economic supplier analysis
  is missing

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Kesko Reporting System( cont)

• GRI social indicator not used by the Kesko
  reportThe social kesko reporting differs most
  from the guidelines1. No information on special
  programmes for minorities, nor on the ratio of
  lowest wage to national legal minimum or cost of
  living2. The questions relating to child and
  forced labour, freedom of association are
  discussed under the standard SA 8000 with the
  suppliers and not in relation with Kesko personnel

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Kesko awards in 2001

• In 2001, Kesko was awarded as being the best
  overall reporter of responsibility by the Finnish
  Forum of environmental experts who compared
  environmental and corporate responsibility
  reports.
• The Helsinki Metropolitan Area Council Waste
  Management awarded the 2001 Natural Resource
  Saver prize to Kesko Food.
• Kesko Eco-efficient construction model was given
  an honorary mention in the Environmental Deed of
  the year category, because they combine
  ecologically and financially business operations.

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Kesko labelling and EMS

• The logistics of Kesko Food LTD and Kesped Ltd,
  became the first companies in the Finnish trading
  sector to obtain ISO 14001 certification in
  January 2001
• In 2002, Kesko food had 445 organic products and
  215 products with environmental labelling (Nordic
  Swan and EU flower for example)
• FSC label for garden furniture

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Kesko Environmental Store Diploma

• In spring 2003, the diploma was granted to
  33K-food stores.
• Conditions to get the diplomathe hypermarket
  director, the employees responsible for
  environmental affairs and the whole personnel are
  trained, and that a comprehensive environmental
  audit is passed.In the audit, made by a third
  party, assessment is made as to whether the store
  fulfils the detailed requirements set for
  awarding the diploma.
• The K-environmental store diploma gained
  international recognition as the UNEP and ICC
  selected it among the 10 best sustainable
  developments partnership out of over 120
  candidates.

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Kesko Social Commitment

• training and questionnaire on staff satisfaction
• Social quality control of suppliersApplication
  of the social accountability SA 8000 (about 100
  kesko suppliers participated on the SA 8000
  training in 1999-2001)
• Internal handbook on social quality control of
  suppliers.
• To promote certification, Kesko has made an
  international co-operation agreement with bureau
  Veritas Quality International.