Sustainability News Issue 2

We are carbon neutral
Volunteer tree-planting on Motuihe Island
Our three-pronged approach to carbon neutrality
Helping families In Bangladesh to lower emissions
Regenerating native forests to absorb carbon
Moving to a circular economy
Protecting migrant workers’ rights in Malaysia

Minister for the Climate The Hon. James Shaw. The Warehouse Group CEO Nick Grayston, CSO David Benattar

L to R - The Hon. James Shaw, Minister for Climate Change, Nick Grayston, CEO The Warehouse Group. David Benattar, CSO The Warehouse Group.

We are carbon neutral

We were incredibly excited by the launch of our carbon neutral programme last month when we announced that since 15 February The Warehouse Group and our four brands are carbon neutral and CarboNZero certified. All our 2018 carbon emissions are offset, and we are only the third large retailer in the world to make such a bold move.

Our challenge is real. The global economy is built on a consumption model that has a limited capacity to manage its impact on the environment. Climate change is already causing massive disruptions to our ecology and economy, and plastic waste has permeated every level of the environment, oceans and even our bodies. The realisation has come that things need to change.

As New Zealand’s largest general merchandise retailer, we understand that widely accessible fast-moving consumer products are counter intuitive with long-term sustainability. We want to prove they don't have to be, that we can lead the transformation of the economic ecosystem that regulates the production and management of goods and resources both up and downstream.

We are investing in transforming our supply chain, remapping our sourcing practices, and end-of-life policies for our products and packaging. Few around the world have done what we are embarking on. The task is massive, and it would be naïve to believe that we can do it alone.

We are in this for the long-term. We believe that innovation, technology and policies are the means to scalable solutions to climate-change and waste management designed in a circular economy model. Like many, we are dealing with immediate problems while seeking the long-term solutions. It’s an operational focus and cultural shift, one we’re driving with the support of our employees and, vitally, our customers, which everyday are demanding courage and leadership from big businesses.

It also reflects our core value of helping Kiwis live better every day, for now and in the long-term. The journey is on, we’re on, we are Here For Good - stay tuned.

David Benattar, Chief Sustainability Officer, The Warehouse Group.


Volunteer tree-planting on Motuihe Island

We wanted some of our team to get a feel for the importance of native forestry and so we took fifty team members to Motuihe Island to volunteer with the Motuihe Island trust, planting native trees and clearing invasive weeds.


Our three-pronged approach to Carbon Neutrality

We are in this for the long-haul, but our programme will take time to build so we are taking a three-pronged approach. Firstly, we have an active emissions reduction programme underway throughout our operations and supply chain, with more than 25 energy and emissions saving projects planned for the next five years, with the goal to reduce emissions by 32% by 2030.

Our reduction programme will run in parallel with our carbon credit investments, which will eventually come mainly from domestic native forest regeneration projects.

Given the time needed for native forest regeneration, we have also invested in international “Gold Standard” carbon credit projects from countries where we have manufacturing operations, namely Bangladesh, India and China. This ensures that the projects we buy credits from benefit local communities while reducing emissions. Some of the social issues we help address are dramatic. They help, for instance, address the health impact of toxic fumes released by the coal, kerosene or biomass cookstoves used in the developing world.

The Warehouse Group has been measuring its carbon emissions since 2009. In 2015, this was expanded to include all our brands.

In 2018, The Warehouse Group ranked third equal among NZ firms for carbon disclosure. The Group has embedded emissions management into its business practices. This includes calculating emissions impact as part of business cases, and factoring emissions into the selection of suppliers. Initiatives underway to reduce carbon emissions include introducing LED lighting in stores, as well as designing for natural light and using more electric vehicles in our company fleet.

In support of our move to become carbon neutral, we are implementing an integrated and portfolio-wide Active Emissions Reduction Programme (AERP). This programme will identify and implement emission reduction activities and is expected to deliver savings of at least 10% on the Group’s electricity spend.

In addition to LED lighting and electric vehicles, the AERP will include an engagement programme aimed at building awareness amongst employees and customers.

A further 25 initiatives have been identified from international shipping and freight, to strategic supply chain engagement and online fulfilment optimisation, to make the business more carbon aware and to build emissions reduction practices into everyday activity.

The AERP will include a revitalised Energy Management Plan, which is being developed in consultation with the Energy Efficiency and Conservation Authority (EECA). This includes the formation of a strategic and technical Energy Steering Group and the implementation of a site-specific energy audit programme stretching out to 2021.


Helping families In Bangladesh to lower emissions

One of the Gold Standard carbon credit projects is an improved cookstove programme run by the Bangladesh Bondhu Foundation, which distributes ‘Bondhu Chula’, or improved cookstoves, to Bangladeshi households.

An estimated 30 million households in Bangladesh use traditional stoves that burn biomass (wood, animal dung or crop waste) to cook food. These fuels have low energy efficiency and cause air pollution in the kitchen and home. Around 45,000 deaths a year among women and children are attributed to diseases caused by kitchen air pollution.

Distributing these stoves increases energy efficiency, improves health outcomes and reduces fuel consumption per household by around 50%, saving around one tonne of biomass annually per household.


Regenerating native forests to absorb carbon

The Warehouse Group is embarking on a programme that will regenerate large areas of native forest requiring as much as 2700 hectares (the equivalent of 2.7 million trees). Forests sequester CO2 by removing it from the atmosphere and storing the carbon as biomass.

We’re anticipating the native tree regeneration will generate enough credits to offset our future domestic emissions (from 2025) and contribute to the government’s plan to plant a billion trees. As 65% of our emissions are domestic, the aim is that by 2025 we will offset all the 26,500 tCO2-e with domestically generated native forestry carbon credits.

To secure the land to generate the eventual credits, we partnered with Trees That Count, a programme of the conservation charity, Project Crimson Trust. Trees That Count champions native tree planting work in New Zealand, by counting the number of trees Kiwis plant each year and accelerating planting rates by raising funds and identifying land for planting projects.

Native forest regeneration projects are important in supporting native flora and fauna habitats. Loss of biodiversity is one of many significant and potentially irreversible results of climate change, so forest regeneration activities that support biodiversity, as well as carbon sequestration are of vital importance.


Moving to a Circular Economy

Circular Economy is a sustainable alternative to the current system. The core objective is to keep resources in use for as long as possible, extracting the maximum value through recycling. To allow for a constant, sustainable flow, Circular Economy also relies on renewable energy sources, such as wind and solar power.
This self-sustaining scheme is based on three principles:

  • Design out waste and pollution. Starting with the source and designing products that are fit for reusing, repairing and recycling.
  • Keep products in use through recycling. Providing a circular life for goods and limiting the amount of waste.
  • Regenerate natural systems

We want to play our part in taking responsibility for the impact we have on the environment and lead the way for others to follow. One of the areas in which we have had the most feedback is reducing and recycling packaging materials.
We have a number of initiatives underway, including the recycling of polystyrene from our Noel Leeming stores and composting food waste at the Store Support Office (SSO). Every year we recycle approximately 55 tonnes of polystyrene at the North Island Distribution Centre where it is compacted and made into art frames. Already, we have compacted enough polystyrene to fill three Olympic swimming pools.


After implementing new composting bins at the Store Support Office, we have increased our compostable waste from 1.5 to 20 tonnes per year. This was due to dedicated bins that clearly demonstrated the types of material that could go into them.

This waste would otherwise have ended up in landfills, broken down anaerobically to produce methane, a greenhouse gas 25 times more potent than carbon dioxide. Now, this compost goes to kiwifruit farmers!





Protecting migrant workers’ rights in Malaysia

Migrant workers play an important role in many economies, including New Zealand’s, but they are often vulnerable to unwitting or deliberate exploitation, on a spectrum from unpaid overtime to modern-day slavery. Along with members of the Responsible Business Alliance (RBA) Foundation, The Warehouse is working with two of its leading Malaysian suppliers to implement a programme in global supply chains to protect migrant worker rights.

The RBA was founded in 2004 by a group of leading electronics companies, and today it is a non-profit comprised of more than 140 electronics, retail, auto and toy companies committed to supporting the rights and wellbeing of workers and communities worldwide.

Supported by a generous grant from the Walmart Foundation, the RBA Foundation and supporting program partner ELEVATE will implement the Responsible Workplace and Responsible Recruitment Programs, which aims to transform the market for ethical business practices and include workers directly in the development of effective solutions to persistent challenges.

Among the countries The Warehouse sources from, Malaysia has the highest number of foreign migrant workers and we have been working for some time with our supplier base there to identify vendors with a strong interest in working with us on this programme.

We were delighted when two of our Malaysian partners Muda Paper Converting (our leading school stationery supplier) and Evergreen Fibreboard (a leading supplier of flat pack furniture) accepted our invitation to join the Responsible Workplace Programme, which is being implemented across several industries in Malaysia.

In addition to management and supervisor training, an important element of the programme is the anonymous baseline and follow-up surveys taken of the foreign migrant workforces in these enterprises. These are intended to provide deeper insight into migrants’ experiences during the recruitment process in their country of origin and once employed in Malaysia.

Human resource representatives from Muda and Evergreen tell us that the training has greatly enhanced communication with their migrant workers and the information from the survey will be carried forward into improvements in their recruitment practices. In an additional next step, the migrant worker recruitment agents employed by Muda and Evergreen will be participating in the parallel Responsible Recruitment Programme which is aimed at certifying best practice and eliminating the prospect of migrants being bonded to their workplaces via the payment of undisclosed and illegal recruitment fees.

The importance of the programme was underscored at the 12 February Migrant Worker Welfare conference in Penang, attended by The Warehouse, when the Malaysian Minister of Human Resources Mr Kulasegaran declared “war on forced labour” in his keynote address and promised to overhaul and modernise the Malaysian law pertaining to the rights and recruitment of foreign workers.

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