Kingfisher’s plan for corporate social responsibility October 2001Kingfisher’s plan for corporate social responsibility October 2001
For further information contact Dr Alan Knight Kingfisher plc North West House 119 Marylebone Road London NW1 5PX www.kingfisher.co.
I am delighted to introduce Kingfisher’s plan for corporate social responsibility. Our aim is to explain how our strategy for operating a company as diverse and dynamic as Kingfisher in a socially responsible manner will be put into action. We also want to provide an overview of some of the ways in which our operating companies are already tackling different aspects of social responsibility. But I want to stress that this document is not intended to be read as a report, nor as a substitute for one. It is a plan, one element of which will lead to the publication of a report by the end of the next financial year.
For Kingfisher, social responsibility is about three things - managing the risks to our business, preparing ourselves for the future and improving the lives of all those whom our business touches. We are proud of the achievements of our operating companies in these areas. Many of them have been involved in exciting, innovative and socially responsible projects for some time. Others lead the debate
in areas such as ensuring that timber comes from well-managed forests and finding new, socially beneficial uses for end-of-life electrical equipment. We believe that it is now appropriate to co-ordinate these activities more rigorously, at a Group level. In doing so I hope we will contribute to a general sharing of ideas and good practice, both internally and externally, and encourage feedback from our stakeholders. This plan marks the start of that process, by introducing our new social responsibility strategy and explaining how we will implement it throughout our businesses.
Ensuring that our commercial success and growth is not achieved at the expense of anybody's quality of life, or of the communities and environments on which we have an impact, presents complex and difficult challenges. We don’t pretend to have all the answers, but having a clearly defined plan is an important first step towards achieving our ultimate aim of operating in a socially responsible manner. It is
also important that we should be open about what we are doing, and why we are doing it. I have no doubt that there will be those who would prefer to see us do more, or less, or indeed nothing at all, in this area. To all of them I would simply say ‘please look at this like any other aspect of our business – read this document, understand the business case for the things we are trying to do, think about the strategy, and then let us know your views’.
To be ready for the future we need to know what the important issues are today and to understand how adopting a strategy based on current trends will either enhance or threaten our business. To remain competitive, our businesses will need to sell more products, open more stores and employ more people. They will need to do those things in a world where there is pressure on natural resources, pressure to reduce our impact on the environment and pressure to ensure everything we do improves the quality of life of everybody we touch.
Introduction Improving the lives of everyone we touch
These issues are not new to Kingfisher or our operating companies. We’ve been reducing our environmental impacts and building our involvement in local communities for more than a decade. Both in France and the UK our companies have been recognised as leaders in the field of environmental management, diversity in employment and ethical trading. We have also begun to address more complex issues such as labour standards in the thousands of factories that supply our products.
All these challenges offer us countless opportunities to create products and systems that will prepare us to operate in a more sustainable, more responsible and probably more demanding society. If we manage it well, this process should enhance the efficiency, brand and profitability of Kingfisher and its businesses.
As a global retailer with a wide range of experience across many different markets and cultures, we are also in a good position to drive forward the debate about socially responsible business in a co-ordinated and intellectually robust way – and we intend to do so. We aim to be recognised as the major retailer with the best understanding of the real issues of social responsibility and sustainable development, in a global context and from a balanced perspective. This will require us to remain at the cutting edge of both thinking and actions.
We can and will give a strategic lead in this area, through the work of the Kingfisher Social Responsibility Committee, which has recently been strengthened by the inclusion of some of the most senior Directors from our business. At their meeting in May of this year the Committee agreed that their vision should be ‘to improve the quality of life of all the people we touch’. This is a difficult task, and not one that we are likely to achieve in the
foreseeable future, but it is a valid and important aspiration, and one that I endorse. I also want to take this opportunity to stress that our individual companies must decide for themselves how to pursue that vision, in ways that make sense for them, in their own markets. Our commitment, at Kingfisher, is to provide the inspiration, tools and support to help and encourage them in that process.
We will look forward to your comments on the plan, and to reporting our progress.
Sir Geoff Mulcahy Chief Executive, Kingfisher plc
After 21 years at Darty where corporate social responsibility has always been about service to our customers, I am looking forward to the challenge of sharing the learning of all our electrical companies across the Kingfisher Electrical Group. Comet and Darty have already benefited from a close working relationship in this area and everyone involved in the business is excited about the benefits to be derived from partnerships, both internal and external to our business.
For the electrical business our main priorities have been improving the treatment and recycling of household electrical equipment that has reached the end of its working life, and in particular using that ‘waste’ creatively to benefit society (for example, RENEW and ENVIE). On a global scale, the most significant of our impacts is the energy consumed through the products that we sell, and we recognise that encouraging energy efficiency is a major challenge for our businesses.
Being an international business brings with it huge opportunities, but means we now face new challenges. Across the world, people are becoming increasingly sceptical and mistrustful of the actions and motives of big business, and Kingfisher must retain the trust it has earned over the last two decades.
One issue the public has become very concerned about is the treatment of the people who make our products. These people are as vital a part of our business as our stores and offices. They live and work in countries as diverse as the UK, China, India and Russia, all of which have very different working cultures and expectations. This makes questions about the social and environmental impacts of our products far more complex than they may at first appear. We rely on our ability to source products globally in order to provide wider choice for our customers, and keep prices competitive. In doing so, we have to be sensitive to these concerns and able to demonstrate what we are doing to address them. The focus for Kingfisher is not to find “perfect” factories but to work with suppliers and potential suppliers to improve existing conditions. We want it to make commercial sense for our suppliers to invest in real improvements, rather than creating a culture of “tests” and “inspection”.
The role of the Social Responsibility Committee is to act as a focus for social and environmental issues within Kingfisher. We have a wide remit to review external developments in the areas which will affect our customers, staff, products and processes, and to ensure that operating companies (all of whom are represented on the committee) respond appropriately. In such a diverse company, it is important that individual operating companies devise their own solutions, appropriate to their own markets and situations. Our role in that process is to encourage, even inspire, them to take action and to ensure that good ideas and best practice are shared both internally and externally.
Dr Alan Knight Head of Social Responsibility, Kingfisher plc
People buy our products to improve their home environment and make their lifestyle even more convenient. People make our products and work in our stores to earn the means to improve their and their families’ quality of life. Together, they form a network of people living throughout the world.
They are linked through the manufacture, sale, use and even disposal of the products we buy and sell. For me, corporate social responsibility is about doing as much as possible to reduce the negative environmental impact of that process and enhance the positive social impact. In other words having supply chains where everyone benefits. By continuously working towards that goal our companies will be well prepared for a more sustainable future.
Jean-Noël Labroue Chief Executive, Kingfisher Electrical Group
Jean-Hugues Loyez Chief Executive, Castorama Dubois Investissements S.C.A.
Margaret Salmon Chair, Kingfisher Social Responsibility Committee
Contents Bill Whiting Chief Executive, B&Q plc
10 years ago a journalist asked me: “How much tropical timber does B&Q stock?” I was unable to answer the question, and he assumed that if I didn’t know, I didn’t care. That conversation marked a turning point for B&Q on social responsibility. Starting with the appointment of an environmental specialist in 1990, B&Q embarked on a journey which has ensured the company is now recognised as a leader in this area. Everyone both in B&Q and in Kingfisher is tremendously proud of the fantastic achievements of the sustainability team and we now look forward to sharing some of that experience and expertise across the group.
Today it is not just journalists who are asking questions about our products but a wide range of stakeholders. As a Group we want to be able to respond to and assure our customers, our employees and our shareholders that our products are made in safe and healthy conditions, in ways that do not damage local or global environments.
We all need successful, efficient businesses and I believe that high workplace standards, good health and safety, fair pay and conditions and care for the environment are important elements in business success.
Kingfisher global reach 2/3
Range of issues 8/9
Lifecycle of a fridge-freezer 12/13
Kingfisher companies and social responsibility 16 BCC 17 ProMarkt 17 Vanden Borre 17 Darty 18 BUT 19 Comet 20/21 Koçtas 22 NOMI 22 Réno Dépôt 23 B&Q 24 B&Q China 25 B&Q Taiwan 25 Castorama 26 Chartwell Land 27 E-commerce 27 Kingfisher Asia Limited 28 The B&Q Buying Office – India 29
Why is social responsibility important to Kingfisher? 32/33
Prioritising the issues 34/39
How will Kingfisher help operating companies? 48/49
Appendix 1: History of policy development 1990 - 2000 50/51
Appendix 2: Kingfisher Group environmental and ethical code of conduct for suppliers 52/54
How green is this report? 55
FRANCE
TOTAL STORES 412
RÉNO DÉPÔT 16
Kingfisher global reach
For more information on what each of our operating companies is doing turn to pages 16-29
UK
TOTAL STORES 565
TOTAL STORES 54
KEY HOME IMPROVEMENT SECTOR ELECTRICAL AND FURNITURE SECTOR BUYING OFFICES PROPERTY COMPANY All details are correct as at 4 August 2001
INDIA - JAIPUR
Do we really improve quality of life?
4/5 People and communities across the world are linked by one common aim – to increase their own quality of life and that of their families. Kingfisher companies provide some of the products and inspiration that help people across the world meet that aim, for example through enabling them to enjoy their gardens or listen to music wherever they are.
Social responsibility is about making sure that in helping our customers improve their quality of life we do not destroy someone else’s. That might mean improving the working conditions in the factories that make the products we sell, using renewable energy sources, or making sure our equal opportunities policies are robust.
What social responsibility means to Kingfisher Our approach to social responsibility encompasses both threats and opportunities.
We must identify and manage the risks to our business; we need to prepare ourselves for the future; and we want to reap the benefits of improving the lives of all those whom our business touches.
But the term ‘social responsibility’ covers a huge range of individual issues (see illustration on pages 8/9). They range from climate change to the diversity of our people, and they have impacts on all areas of our business, from procurement and recruitment to corporate governance.
A more sustainable society
Sustainability or ‘sustainable development’ is a cherished goal of policy makers almost everywhere, even though it isn’t a concept that consumers, or businesses for that matter, find easy to relate to. It sounds rather theoretical, but broadly it means meeting the needs of today without compromising the ability of future generations to meet their own needs. This includes using natural resources wisely, avoiding pollution and generally operating with one eye on the future consequences of all our actions.
In practice, operating sustainably comes down to ensuring that in improving our own quality of life we don’t, knowingly or unknowingly, harm the quality of life of anyone else, whether that person is in the next street or the next generation.
The desire to achieve sustainability underpins much of the new environmental regulation which affects our businesses and it is at the heart of many of the campaigns launched by environmental groups. It is therefore a major consideration for our businesses. Operating sustainably is an important component of behaving in a socially responsible fashion and if we fail we will put our reputation at risk. More constructively, we need to play our part in helping to build a more sustainable world, while at the same time preparing ourselves to operate successfully in such a world.
A more transparent society
We are living in an increasingly informed society. Instant global communication, cheap international travel and the huge amount of information reaching all of us every day means that the public is more aware than ever before of where and how products are made. The environmental and social consequences (both good and bad) of business activities are easily identified and can be communicated to a global audience in a matter of hours. Companies that are revealed to be operating in ways that don’t meet public expectations can find themselves facing global campaigns and unprecedented criticism.
A more concerned society
Public expectations of corporate behaviour are rising all the time. It is no longer sufficient for companies to obey laws, pay taxes and make profits. Increasingly they are expected to do all these things as a bare minimum, and also to contribute to making the world a better place. There is no doubt that some of the expectations now being placed on businesses are unreasonable, but the message is clear. Businesses must embrace the social responsibility agenda.
An increasing number of consumers, particularly in Europe and other parts of the developed world, are both willing and able to take their business away from companies who don’t meet their expectations. Consumer boycotts, and other forms of activism, are increasing and multinational companies are frequently the targets.
6/7
Addressing these issues is not some sort of ‘optional extra’. Whether we like it or not they will, sooner or later, change the way we do business because they are driven by broader developments in society. Those developments include:
Range of issues
Toxics/chemicals PVC Timber and forestry Peat VOCs/Indoor air pollution
Provision of recycling Staff awareness Role of E - commerce Product take-back
Sourcing and manufacture
Products
Child labour Working conditions Health and safety Bonded labour Slave labour Prison labour
Fair wages Cottage industry/home working Freedom of association Living conditions in dormitories Global versus local sourcing Transparency and accountability
Pollution Supply chain auditing
Electrical goods recycling Packaging Environmental claims Labelling Information End of life issues
Energy efficiency of products Embedded energy in products Climate change Toxics/chemicals PVC Timber and forestry
Organic gardening Peat bog conservation Volatile organic
compounds in paint Indoor air pollution
Kingfisher companies encounter a wide range of social and environmental issues in the different phases of their operations.
These include:
Communities
Distribution and transport Green commuter plans Out of town/in town stores Energy use and carbon
dioxide production Site management
in stores Role of e-commerce Product take-back
Disability Race and culture Gender and sexuality Age Work-life balance
Training and life-long learning Staff awareness Payroll giving Customer information Health and safety in stores
Relationship with local store neighbours/community
Relationship with corporate community such as investors
Relationship with supply base
Volunteering by staff Stakeholder dialogue
There are issues connected with everything we sell. This diagram illustrates just a few of the issues surrounding a family barbecue in the garden.
Product issues
Good waste management makes our stores good neighbours, saves money and helps the environment. It also keeps stores tidy, making them pleasant places to shop.
WASTE MANAGEMENT - GOOD OR BAD?
Extracting peat destroys wildlife habitats. B&Q offers a full range of peat free composts and is phasing out peat use entirely.
PEATLAND DESTRUCTION - YES OR NO?
WORKING CONDITIONS - GOOD OR BAD?
The spade is made in India. A local organisation works with our production experts to ensure good working conditions in all the factories that supply B&Q.
10/11
PAINT - HIGH SOLVENT OR LOW?
The garden bench comes from Bolivia. It is independently certified by FSC as coming from a well-managed forest.
FOREST MANAGEMENT - GOOD OR BAD?
Making charcoal from mangroves destroys important wildlife habitats. Using charcoal from FSC certified forests gives reassurance of good management. In some cases we can even use charcoal from local woodlands, which keeps coppice trees alive and helps birds and spring flowers.
MANGROVE DESTRUCTION - OR LOCAL PRODUCT?
The barbeque comes from Taiwan. Our inspection teams work with the factory to ensure it isn’t causing pollution.
FACTORY POLLUTION - YES OR NO?
Many people want to garden without chemicals. That’s why B&Q has an organic range.
CHEMICAL GARDENING - OR NATURAL?
Solvents (known as VOCs) given off by paint when it dries cause pollution and contribute to climate change. Clear labels provide customer information.
Lifecycle of a fridge-freezer
- environmental impacts of mining - ensuring health and safety of workers
Component suppliers
- fair wage rates and safe working conditions - energy and water used in production - global warming gases emitted - waste reused, recycled or disposed
Manufacturers
- audits of environmental standards - design for low energy use and ease of recycling - packaging reduced or recycled
Kingfisher stores
- Kingfisher employs over 90,000 people - staff trained to give advice on energy efficiency
and safe use of products - health and safety for staff and customers - support for schools and local community
regeneration - energy used for heating and lighting - waste minimised and recycled - home delivery to reduce car use
Households
- fridges and freezers consume a large proportion of electricity used in the home
- correct use leads to safe and healthy food and lower electricity costs
- best new models can save up to £46 a year in running costs
Repair and reuse
Safe disposal and landfill
- hazardous waste separated
Transport
3
4
5
6
8
9
There are issues connected with every stage of the life cycle of our products. This diagram illustrates just a few of the issues that occur during the life of a fridge-freezer.
7
1
2
8
3
9
4
5
7
6
COMPONENT SUPPLIERS
KINGFISHER STORES
households
parts that cannot be recycled or remanufactured
- includes safe disposal of freon gases (CFC and HFC)
RECYCLING
HOUSEHOLDS
12/13
How much is enough?
Our companies have already achieved a great deal in addressing social and environmental issues such as sound forest management, repair and reuse of electrical goods and ethical trading.
Yet the more we do the more we realise we need to do, because of Kingfisher’s commitment to continuous improvement, because of the need to constantly track and respond to new and existing issues, and because in order to lead the way we have to constantly strive to be better. There are still serious global and local issues which affect our business which we need to address.
Social responsibility is an ongoing commitment to a new way of doing business which recognises our role in society and the need to respect both people and the environment in our approach to our business.
How do we know what is right?
14/15
How do we know whether the forest photographed here is being managed well or not? And what will happen when the photographer isn’t around? Difficult questions like these accompany many of our products. Finding the right answers requires complex judgements, balancing economic, social and environmental agendas. As it happens, this forest has been independently certified by the Forest Stewardship Council (FSC), but for other issues we often have to reach decisions on the basis of our own judgement.
Kingfisher has been developing a strategic approach to social responsibility since 1990, with environmental and social policies in place, and mechanisms to drive implementation. More details are given at Appendix 1. This approach was effective, but it was developed at a time when Kingfisher was made up of UK and French retail chains. Since then, Kingfisher has expanded across Europe and Asia, opening new chains in Taiwan and China, establishing buying offices in Hong Kong and (through B&Q) in India, and acquiring businesses throughout
Europe. It is now appropriate, and necessary, for Kingfisher to develop a social responsibility strategy which reflects the global nature of the Group by being flexible enough to adapt to the diverse cultures it contains, while ensuring a common approach and philosophy across the world.
Kingfisher’s commitment to social responsibility is based on a foundation of work already being done by many of our operating companies, in environmental management, ethical trading,
diversity (equal opportunities) and community involvement. The next section of the plan provides an overview of the kind of work that is already underway. As you read it, bear in mind that we are describing ‘work in progress’ and that, as in any other area of business, some projects have been more successful than others. There are many more things that the operating companies can and will do, building on this foundation of experience and acquired skills, as our work develops.
Kingfisher companies and social responsibility
16/17 BCC
SECTOR: ELECTRICAL AND FURNITURE LOCATION: NETHERLANDS
BCC is a Dutch electrical retailer. In common with other European electrical retailers, its main concern is managing the disposal of customers’ waste electrical and electronic equipment. It is part of an industry foundation which develops ways of collecting and recycling end-of-life electrical equipment (refrigerators, washing-machines, TVs etc.). The foundation is financed by a removal contribution which is levied on electrical appliances and paid by the customer for each electrical appliance they buy. The final price and the removal contribution are separately listed on the price-ticket. Approximately 40% of BCC customers return their old appliances, and these are refurbished by projects employing people who have been long-term unemployed, and sold in special shops to people on low incomes.
In BCC shops, energy efficient appliances are clearly displayed and labelled by the supplier, and by sending this label back to the supplier the customer can receive a refund of fl.100.
There are battery collection points in all stores for recycling of all batteries.
PROMARKT
SECTOR: ELECTRICAL AND FURNITURE LOCATION: GERMANY
ProMarkt is a German electrical chain. Being based in Germany, the company’s environmental impacts are controlled by strict national laws, and recycling is common throughout the business. Old goods are collected from customers’ homes as part of their commitment to customer service. Most of these are stripped down and recycled.
Part of the company, Wegart Grosslabor GmbH & Co KG, is a laboratory which processes films. The laboratory runs a waste management project focusing on the recycling of chemicals used in the developing process. The project recovers 1.3 tonnes of silver a year, all chemicals are reused and where it has been impossible to recycle a chemical, it is disposed of by specialist agencies. The vast majority of film cases are also recycled.
Going forward, ProMarkt intends to establish a social and environmental working group to develop the agenda throughout the business.
VANDEN BORRE
SECTOR: ELECTRICAL AND FURNITURE LOCATION: BELGIUM
Vanden Borre is the leading Belgian electrical retailer. Belgium was one of the first countries to introduce recycling legislation, and as such all electrical retailers are now obliged to take back any electrical goods, large or small, from customers. Vanden Borre is a member of ‘Recupel’, an organisation that ensures recycling of appliances and is funded by a levy charged on all appliances sold. Vanden Borre has made this levy clearly visible in-store and in advertising, so that the customer clearly sees not only the final price but also the levy.
At store level, general waste is recycled and energy efficiency ratings are clearly displayed and explained in press advertising. Battery collection points are provided in all stores for recycling of all batteries.
Vanden Borre recently made an agreement with Belgian ‘kringloopcentra’ (which translates as ‘recycling centres’), allowing them to pick up old appliances once a week. These centres collect and repair all sorts of goods, particularly old electrical goods and furniture. They employ people who are not able to find a job, and sell refurbished products mainly to low income families. The project is similar to Darty’s ENVIE project, and Vanden Borre hopes to develop its relationship with the kringloopcentra in the same direction.
DARTY
SECTOR: ELECTRICAL AND FURNITURE LOCATION: FRANCE
appliances are collected by Darty from customers’ homes when new products are delivered. About 10% of the appliances collected are suitable for repair and donated to ENVIE. The other 90% are dismantled and sold for appropriate industrial treatment.
This project is part of Darty’s overall programme of waste segregation and recycling. In the Paris area (which includes 54 of the 183 Darty stores), waste from stores is collected through a reverse logistic system (backhauling) and sent to the waste segregation and treatment centre (created in 1996) located at the distribution centre. Once segregated, waste is sent to the most appropriate industry for recycling or energy production. Only 5.7% of Darty’s waste ends up in landfill.
Darty is currently working to reduce the impact of its own transport. Drivers attend training sessions - run in partnership with car suppliers and transport companies - to learn how to drive in a way that respects the environment. The company also sets rules of conduct and controls emission standards. A high proportion of the cars in its after sale service fleet now use LPG and/or unleaded petrol.
Darty is France’s leading electrical retailer. The company has been involved in issues of social responsibility for many years and has always aimed to achieve positive social impacts even while tackling the environmental issues raised by electrical retailing. As a result, Darty has an integrated approach to social and environmental issues and is particularly involved in social inclusion and waste segregation and treatment.
Darty’s partnership with ENVIE is a prime example of the company’s approach. It began in 1985, when ENVIE was created. ENVIE now runs a network of 30 companies throughout France. These companies run two year programmes that train people with learning difficulties to repair domestic electrical appliances. The appliances are then sold on the second hand market (in ENVIE ‘stores’) at a low price and with a one year guarantee.
Darty has been involved in writing the training tools for the ENVIE businesses, but the company’s main contribution is to provide ENVIE with electrical appliances on a regular basis in all French regions. These
Darty is also involved in other social projects, for instance with ARES, a project working for the employment of homeless people, and FACE, the Foundation Against Exclusion. It also funds some medical research, mainly into disability.
Inside a Darty store
SECTOR: ELECTRICAL AND FURNITURE LOCATION: FRANCE
BUT supports a French charity by giving them furniture previously destined for waste and disposal which they then repair and re-use.
It is also worth noting that in France diversity and equal opportunities are dealt with in a different way from many of the other markets in which Kingfisher operates. Many of the issues – such as working hours and maternity and paternity packages - are dealt with through strong social legislation. The record of all our French companies on social issues is therefore quite different from our other companies.
COMET
SECTOR: ELECTRICAL AND FURNITURE LOCATION: UNITED KINGDOM
Parts of the retail sector are still poor in the way they approach recycling – if all adopted the approach shown by Comet, waste reduction and recycling would gain in leaps and bounds”.
A more ambitious waste management project, designed to achieve new uses for waste items, was inspired by the work undertaken in France by Darty and the charity ENVIE. In August 2000 Comet became one of the founding partners of RENEW North East. Based in Gateshead, RENEW provides high-quality vocational training to the long-term unemployed through remanufacture and recycling of white goods (refrigeration, washing machines and electric cookers) donated by Comet’s Home Delivery Platform in the North East.
Over the first year of operation RENEW has diverted over 5,000 appliances from the waste stream, around 1,000 of which have been remanufactured and re-sold in the local community at prices accessible to low-income families. 29 trainees have completed the one-year RENEW training course. As in France, there are now plans to replicate the RENEW model across the UK, and the second operation opened in Leeds in August 2001. This project seeks to provide training to people with disabilities as well as the long-term unemployed.
Comet’s biggest environmental impact arises from the consumption of electricity and gas during the use of its products. Energy labels, which rate appliances on a relative scale of energy efficiency, are displayed prominently at the point of sale on a range of white goods (including refrigerators, washing machines, tumble-dryers and dishwashers). All retail staff now receive a full day of training which explains the origins of the label, its context in terms of European Climate Change Policy and how to use the label during the sales process. The quality of this programme has been recognised by the UK Government’s Energy Saving Trust.
Comet is the UK’s second largest electrical retailer. The company first adopted a structured, targeted approach to social responsibility in 1997, with the internal publication of a three-year Environmental Action Plan for the Millennium. The plan set targets for improvement in a range of operational and product related issues.
One of the first objectives of the plan was to establish a company-wide recycling programme for the 5,000 tonnes of packaging waste being sent to landfill each year. Zero In On Waste, an on-going programme of change in waste management, was launched in 1997. Baling and compacting facilities were established at Regional Distribution Centres and empty space in lorries was used to return segregated packaging to central recycling facilities. As a result, in 2000, Comet recycled over 600 tonnes of expanded polystyrene, 3,000 tonnes of cardboard and 300 tonnes of polyethylene pallet wrap.
In recognition of the success of Zero In On Waste, Comet won the award for Best Industry Initiative at the 1999 UK National Recycling Awards. According to ‘Materials Recycling Magazine’, one of the awards sponsors, “…Comet has set an excellent example in its broad approach to recycling and sustainable waste management.
Assessing appliances suitable for remanufacture at RENEW
20/21
Comet is a partner in the Energy Saving Trust’s Energy Efficiency campaign and since 1997 has been closely involved with national activities to promote energy efficient appliances through stores. During the summer of 1999 Comet ran the first of four promotions in which customers were offered a reduction in the purchase price on a range of efficient appliances when replacing their existing models.
Comet also seeks to address the needs of its disabled customers. Comet’s new format destination stores are designed to provide improved access for customers with disabilities, with wide aisles and lowered till counters which are more useful for wheelchair users. Induction loops are fitted at tills to improve the clarity and volume of voice levels for hearing aid users. Mobile induction loops are also fitted on the tunics of trained sales staff. This year the company has run a series of successful open days for disabled customers to encourage feedback on store layout, accessibility and staff training. In partnership with RICABILITY, an independent charity, Comet also provides buying guides on key product categories for elderly and disabled customers.
Comet has adopted Macmillan Cancer Relief as its national charity. Macmillan provides expert treatment and care through specialist Macmillan nurses and doctors, information, buildings for cancer care, and grants for patients in financial difficulties. Comet has set itself a target of raising £200,000 for Macmillan by May 2002.
The most efficient products carry the EST’s ‘recommended’ label
Comet’s new stores give easy access for customers using wheelchairs
NOMI
KOÇTAS
SECTOR: HOME IMPROVEMENT LOCATION: TURKEY
After the earthquake which killed more than 25,000 people in western Turkey in 1999, Koçtas was one of the companies which donated money, clothes and other urgent needs to the people living in the affected towns and countryside.
In 2002, Koçtas is planning to initiate a simple version of B&Q’s QUEST programme. This will enable it to manage suppliers’ environmental, social and product quality performance. The company has a policy of not selling any product that is not certified by the Institute of Turkish Standards.
Koçtas is aware that its social responsibility activities will grow as the business grows.
Koçtas was founded in 2000 as a joint venture between B&Q and Koç, the biggest conglomerate in Turkey. The company has 5 stores in 4 different regions.
Being a young company, Koçtas is developing its social responsibility activities. Its head office has begun to introduce environmental housekeeping measures such as reducing the amount of paper used, collecting waste paper for recycling, and saving energy through small measures such as switching off lights.
The company is getting involved with its neighbours through special events like “day out in the garden” with people living in a local retirement home and wall painting activities for kids visiting stores.
Koçtas is one of the sponsors of Vehbi Koç Foundation, the first large scale foundation in Turkey. The foundation serves the community by supporting existing active organisations. It has sponsored and contributed to the building of many schools, dormitories and health care clinics.
Based in Poland, NOMI is involved in two social responsibility projects. It supports orphanages financially through donations in kind and the organisation of events at Christmas, and offers practical assistance to families in difficulty through donation of products.
22/23 RÉNO-DÉPÔT
SECTOR: HOME IMPROVEMENT LOCATION: CANADA
In 1995, in partnership with the Society for Disabled Children in Quebec, the ‘Auberge Réno Dépôt’ project (Réno Dépôt hostel) was launched on the Papillon Camp site. Work started in 1998 to build 4 houses, each of which could accommodate 25 disabled persons, and to revamp the cafeteria and other parts of the site. The company’s associates, suppliers and customers have funded the project over 5 years. A total of $1.5m Canadian has been donated, of which $1m was provided by Réno Dépôt and $500,000 was donated by suppliers, much of which was as gifts in kind.
Réno Dépôt also funds medical research and many of its stores are involved in local projects.
Réno Dépôt is a Canadian home improvement chain, based in Quebec, with several stores also in Ontario. The company has run a number of environmental and social responsibility programmes.
It has been particularly involved in waste issues, and has set up a program for the collection and recycling of cardboard, paper, glass, plastics, and metals in stores. A pilot project is currently being trialled in Quebec to collect plants and earth for further composting by a sub-contractor. This is planned to be extended to other stores.
In addition, Réno Dépôt sponsors various events in Canada with particular emphasis on culture, education and sport. For instance, in 1999, the company took part in the “Corporation du 35ème Mondial des Métiers”, which promotes technical training for various jobs. The event involved 600 young people. It was also a partner in the “Opération Patrimoine Populaire de Montréal 1999”, which raises awareness of the architectural heritage of Montreal.
B&Q
SECTOR: HOME IMPROVEMENT LOCATION: UNITED KINGDOM
For over ten years, through a culture of constant improvement and inspiration and working in partnership with its stakeholders, B&Q has achieved significant improvements in the environmental impact of its operations, suppliers and products.
Timber is one of the key challenges B&Q has had to face. Work began in 1991 with the identification of timber sources and suppliers, and the publishing of the company’s first report on timber: ‘Tropical Deforestation – The DIY perspective’. The company then set itself two targets: that by 1993 all timber sourcing would be transparent, and that by 1995 all timber would come from internally identified well-managed sources. These targets led to a programme of continuous improvement. They also made it clear that B&Q could not tackle this issue alone, and that a credible international system of independent certification and labelling was needed. As a result, B&Q helped create the now internationally recognised Forest Stewardship Council (FSC). In 1995 B&Q set a further target, that by 1999 all its timber should be from independently certified, well-managed sources. B&Q revised and re-launched its timber policy in 2000.
B&Q paint also carries a label indicating the level of VOC (volatile organic compounds) emissions associated with it. This provides customers with information which enables
them to make an informed choice. As a result of the labelling scheme and development of low VOC alternatives, the company has achieved a 21% reduction in average VOCs per litre sold.
B&Q’s environmental management programme QUEST (which stands for QUality, Ethics and SafeTy), has driven environmental improvements with suppliers and stores. In 1999, 84% of its suppliers met or exceeded performance targets.
In the community, almost 1,000 Better Neighbour Grants (previously known as Green Grants) have been awarded to stores for use in local projects to date. Certain waste products are also donated to local community groups, benefiting them and saving the business over £500,000 a year in disposal costs.
B&Q has also become well known for its work on diversity. There is no upper age limit to retirement or graduate recruitment within B&Q, and the company has won much praise for its positive approach to employing older workers. The fifty-plus age group now accounts for 18% of the B&Q workforce.
The company has also taken the lead in improving customer service and access for disabled customers and employees. The number of disabled people employed by B&Q
has increased by 300% over the last two years. Every person employed by B&Q receives disability awareness training and by 2004 it is planned that every store will have been refitted to increase accessibility.
B&Q’s innovative approach meant that in 1999 and 2000, it was the overall winner of the UK’s EASE Awards (Ease of Access to Services and Employment). In 2000 it also received the Business in the Community Award for Innovation through Partnership.
B&Q’s sustainability programme, achievements and approach were rewarded in 2001 when the company won one of the UK’s highly prestigious Queen’s Awards for Sustainable Development.
Further information on the company’s work on ethical trading can be found in the section on B&Q’s buying office in India on page 29.
Bill Whiting, Chief Executive of B&Q plc, receives the Queen’s Award from the Lord Lieutenant of Hampshire, Mrs Mary Fagin
24/25 B&Q CHINA
SECTOR: HOME IMPROVEMENT LOCATION: CHINA
begun to educate its vendors and customers on the issues where appropriate.
It has also begun to recycle materials in store. All cardboard and plastic is collected and reused by local customers. The next stage will be to introduce sorting bins for plastic, paper, metal and glass.
In terms of packaging, at present B&Q China does not generate enough packaging material to introduce a large scale recycling programme. However, once volumes have reached a workable level it will embark on a programme for its own brand packaging in conjunction with a packaging solutions company, as well as encouraging its suppliers to do the same.
B&Q China also audits its suppliers and uses Kingfisher supplier assessment guidelines and procedures to do so.
Chinese Government policy towards environmental issues is still developing. B&Q China intends to monitor the progress and further develop its environmental policies as the laws change. Its key areas of concern will be sourcing timber from well managed forests, assessing suppliers on environmental and human rights issues, and safe disposal of harmful or toxic waste.
B&Q China is B&Q’s newest international venture. With the opening of B&Q’s biggest ever store in August 2001, B&Q China now has 4 stores: 3 in Shanghai and 1 in Suzhou. The chain plans further expansion across China over the next 5 years.
The chain has already begun to take its environmental responsibilities seriously and has, like its international counterparts, adopted measures to ensure this is applied in all areas of business.
One of those areas is timber buying. The stores already stock some wood products certified by the Forest Stewardship Council, and have recently introduced own brand flooring which is FSC certified with full chain of custody. There are however no FSC certified forests (or wood product manufacturers) in China, so all certified products must be imported. B&Q China has
B&Q TAIWAN
SECTOR: HOME IMPROVEMENT LOCATION: TAIWAN
B&Q Taiwan is a small Taiwanese home improvement chain. Environmental management is a relatively new concept in Taiwan, but the company has already begun to implement projects. For example, all packaging uses recyclable PP or PE plastic, rather than PVC, and customers are encouraged to recycle batteries at a battery reclaim box in every store
In January 2002, the Taiwanese government will launch a law requiring fluorescent tubes to be recycled. B&Q Taiwan will participate in this activity and is applying for a recycling point.
The stores also stock environmentally responsible products such as bins and bags for sorting waste.
The opening of a new B&Q store in TaiwanThe opening of the huge Yangpu store in August 2001
CASTORAMA
SECTOR: HOME IMPROVEMENT LOCATION: FRANCE
Castorama also takes responsibility for improving the impacts of the products it sells. Since 1999, the company has run a supplier audit scheme to assess the environmental impacts and business ethics of its suppliers. It has developed a partnership approach to its relationship with its suppliers, and as a result was awarded the ‘Grés d’Or’ by the FEEF (Fédération des Entreprises et Entrepreneurs Français) in 2001, for its co-operation with one of its suppliers, Mobois.
In order to tackle the timber issue Castorama has increased contacts with professional organisations such as Fédération Nationale du Bois, state organisations such as Office National des Fôrets, and environmental NGOs such as WWF and Greenpeace. In November 2000 the company joined France’s WWF timber working group – the Club Profôrets - to encourage the use of certified labels such as FSC by its suppliers. It is also involved in the steering group for the development of the ISO14000 standard for timber and forests. In partnership with the Fédération Française des Magasins de Bricolage, the company is now in the process of requiring its timber suppliers to give the timber species and origin on timber product tags.
The Castorama Group is France’s number one home improvement retailer. In 1995 it established a Quality department to address the health and safety of customers and the impact of products.
Over the past 3 years, this department has run a successful project aimed at preventing accidents in the home in collaboration with CSC (Commission de Sécurité des Consommateurs) and AFNOR (the French standards organisation). As part of this, several publications were developed in partnership with expert organisations and displayed in stores. They included a comic book for children aged 5 - 10 to help them understand potential hazards in the home or while doing DIY; 8 leaflets on first aid at home; and 5 leaflets on specific hazards in particular rooms, including the kitchen, garden and bathroom.
In 2000, in partnership with ADEME (Agence De l’Environnement et de la Maîtrise de l’Energie), Castorama published a customer information leaflet which aimed to raise awareness about the environmental impacts of home improvement and gardening activities whilst buying, using and disposing of its products. Entitled ‘Comment bricoler et jardiner en respectant l’environnement? Les bons gestes’, 150,000 of the leaflets were distributed through stores.
Also in 2000, a campaign in schools was launched to raise children’s awareness of the role of trees; a magnet board showing the life cycle of a tree was distributed free to those schools requesting it.
The company has been involved in a number of social projects for many years. It sponsors Sébastien Barc, a disabled sports champion employed at Castorama, who won 3 medals at the Sydney Paralympics in 2000. In 1996 it created a social fund to help employees that face particular difficulties due to accidents or disability. Since 1997, it has supported an annual Telethon collecting funds for research into genetic disorders. It also funds the ‘Fondation de la Deuxième Chance’ acting for social inclusion, and is a partner in the French Federation for Handisport Athleticism. Stores are also involved in various local social projects on their own initiative.
The garden centre at a Castorama store
26/27 CHARTWELL LAND
SECTOR: RETAIL PROPERTY LOCATION: UNITED KINGDOM
Imperial Park, Bristol is being used as an environmental best practice project with a range of measures in place which have been agreed with two firms of environmental consultants. The object is to take forward the learning points from this scheme into future projects.
All consultants and contractors are asked to demonstrate their commitment to environmental issues before appointment and Chartwell has produced a handbook for tenants which will help them to make informed decisions on environmental matters when fitting out and occupying their stores.
Chartwell Land’s policy on social responsibility is to put something back into the local communities where it has undertaken a major investment or development project. Examples of this include a sensory garden at a school for disabled children in Glasgow, the construction of a Women’s Centre and crèche in Watford, refurbishment of the children’s library in York and the provision of cycle paths, off-site landscaping and a new bridge over the River Nene at Northampton.
Chartwell Land is Kingfisher’s specialist retail property company, purchasing and developing sites for the Group’s companies in the UK.
Chartwell Land is recognised within the property industry as taking a responsible and active role on environmental issues. As founder members of the Property Environment Group, the company is benchmarked annually against its peers in the property market and has consistently performed within the upper quartile. Chartwell has replaced its environmental policy with an Environmental Management System which has clear objectives backed up by measurable targets. These are externally audited every year.
Chartwell Land has agreed to sponsor and sit on the advisory panel of the new BREEAM for Retail Scheme run by the Building Research Establishment, which will measure the environmental efficiency of new retail buildings. Chartwell achieved a “Very Good” rating in a BRE Environmental Assessment Method assessment of its retail park at Great Western Road, Glasgow, and is on target to achieve an “Excellent” rating at the new B&Q Warehouse at Imperial Park, Bristol.
E-COMMERCE
Aware of the growing perceptions that e-commerce could encourage more sustainable forms of retailing, Kingfisher was one of the sponsors of the Digital Futures project undertaken by Forum for the Future, a UK-based sustainable development organisation of which Kingfisher was a member from 1996 until 2000.
This research concluded that whilst e-commerce could make a significant contribution to more sustainable retailing this would only happen if companies engaged in e-commerce adopted strategies that ensured their operations had positive environmental and social impacts. Kingfisher is therefore committed to reviewing the social responsibility of its e-commerce activities by the end of 2001.
Opened in 1995 as Kingfisher’s sourcing office in Hong Kong, Kingfisher Asia is responsible for the co-ordination of Group sourcing operations in most of South East Asia, where total export volume in 2001 is expected to exceed £300 million, filling over 10,000 40ft containers. This co-ordinated approach has proved so successful that it has been extended to include satellite offices in Shenzhen and Shanghai.
KAL has been a valuable partner in helping operating companies deliver their environmental objectives. It was KAL’s co-ordination that resulted in the FSC certification of B&Q’s wooden bathroom accessories and a substantial proportion of garden furniture from Indonesia and Vietnam.
KAL has also ensured that operating companies’ packaging polices are adhered to, and worked with its own suppliers to reduce packaging. Since 1997, the elimination of polystyrene trays in toilet seat boxes has not only taken them out of eventual landfill but has also saved B&Q more than £100,000 a year.
With more than 1,000 factories in the region, KAL’s biggest challenge is ensuring that working conditions in supplier factories comply with the Kingfisher ethical and environmental code of conduct. This is particularly difficult in China, where the culture and business environment is different from Europe, and where there is only a very limited number of civil society organisations to help guide the company’s approach. Nevertheless, KAL was the first part of Kingfisher to field-trial the code, and all new suppliers are now measured against these criteria. Where remedial action is required systems are also in place to ensure that this is achieved. Third party and in- house auditors carry out assessments of all new factories and where possible KAL works with suppliers to develop improvement plans. An extensive training programme for auditors has now been completed.
Kingfisher has co-ordinated a number of factory specific improvement projects, including a trial of the new independent SA8000 standard in a bathroom accessory factory. In a cast iron bench factory, KAL is into the fourth year of a continuous improvement programme which has seen the accident rate in the casting unit decline by 90% since 1997.
KAL is also part of the local Hong Kong neighbourhood, and has recently linked up with a local charity called Crossroads, through which unwanted manufacturers’ samples, such as tools, are sent to self-help projects throughout China. Some of the office staff have also taken part in a 25km sponsored hike, raising HKD 12,000 (£1,200) for a local environmental group.
KINGFISHER ASIA LIMITED (KAL)
Patio furniture sourced by KAL
Until last year most of B&Q’s buying from India was completed via British-based importers. But last year the company opened its own buying office in Jaipur. The office now buys products including leather tool bags and garden tools from several factories. Although this office was only opened recently, B&Q has been working on supply chain issues for some time, with its suppliers and import agents, achieving positive results in a number of areas.
Looking carefully at working conditions is now an essential component of the buying process. By inspiring factory owners to make the necessary changes, improvements to profitability, final cost price and working conditions have all been possible. Experience shows that this approach ensures real changes, rather than a cosmetic exercise ‘to keep B&Q happy’. Experts in production techniques visit every factory prior to orders being agreed and again at regular intervals after the orders have been placed. They are assisted by an independent non-governmental organisation called International Resources for Fairer Trade (IRFT). The aim is to improve both the productivity of the factory and the working conditions. In November 2000, potential suppliers attended a seminar in Delhi to become aware of B&Q’s commercial and ethical values.
Examples of this approach in action include:
Brassware There are major health and safety issues associated with casting, polishing and other manufacturing processes. Since 1992 B&Q has worked with its brassware suppliers to address all of these issues. One joint initiative aimed to reduce dust in the polishing unit by improving extraction units. This has resulted in a dramatic reduction in airborne dust. Together with other improvements, this has both increased productivity in the factory and reduced health risks.
Coir doormats These are made from fibrous coconut husks. They are produced in a complex network of cottage units around the Cochin region of Southern India. B&Q, with the help of IFRT, has helped improve the productivity of the cottage units to increase wage levels. As far as possible, health and safety and environmental pollution controls have been established. The company has also set up micro-credit schemes in some areas to help those on low wages access credit.
Hand knotted rugs B&Q was the first retailer to have all its rugs certified by the Rugmark scheme, an independent organisation that certifies that the manufacture of rugs does not use exploited or illegal child labour. In one village where a high proportion of rugs destined for B&Q are made, over 800 weaver families have benefited from a health centre opened jointly by B&Q and its supplier.
Garden gloves Castorama is also aware of the potential ethical issues associated with India. The company has moved its supply of gloves away from a supplier with poor working conditions and an unacceptable level of pollution from the tanning process, and intends to introduce continuous improvement programmes for all Indian supplier factories along the same principles as B&Q.
Garden tools One of the first projects supervised by the new buying office has significantly improved the working conditions in a garden tool factory. This has resulted in improved productivity and reduced the cost of the products to B&Q and, ultimately, to their customers. Everyone in the chain has benefited.
The buying office is already supporting the local community in other ways. B&Q and its Indian business partner have agreed to commit 1% of turnover to local causes. They are planning to use these funds to help meet the needs of disabled people in India and other countries through a working relationship with Motivation. This is a charity which designs wheel chairs appropriate for use in developing countries, and trains local organisations to build them.
THE B&Q BUYING OFFICE – INDIA
28/29
Women separating coconut husks from their shells to make coir
Is this product ready for a sustainable society?
30/31
As society becomes more sustainable there will be further, far-reaching changes to the way our products are designed, manufactured, used and disposed of. For us this could be a threat or an opportunity - it all depends on how ready we are.
To be ready for this future we need to be able to spot trends in environmental and social issues that will affect our ability to do business now and in the future, and be flexible and creative enough to respond to them in all the markets where we operate.
This is no small task. There are hundreds of issues that could affect us or our products. We must understand and manage them before they start to dictate to us.
Why is social responsibility important to Kingfisher? Can social responsibility support Kingfisher’s plans for growth and commercial success? What is the business case and where will we see the benefits? Well, we don’t yet have any way of quantifying the benefits (and nor, we believe, does anyone else), but here are six areas in which we expect that social responsibility will help our businesses.
Being ready for the future
A successful social responsibility strategy will allow us to identify and manage issues and trends which have the potential to undermine or enhance the business plans of our operating companies.
Respect for people
We are a multi-cultural business. The more we understand cultural diversity, the more we understand our customers, staff and suppliers. Empathy with people’s values makes our companies more attractive places to work at all levels. For example, working in the local community provides a great opportunity to create a real sense of teamwork and belonging in the organisation. This in turn helps to keep staff turnover low and build valuable expertise and experience.
Stores that communities welcome
Creating stores which are active and involved members of the neighbourhoods in which they operate improves staff morale, local awareness, recruitment, and customer loyalty.
Product innovation
New and innovative products keep our stores exciting and help us meet customer desire for choice and value. As the leading retailer in many of our markets we have to be ahead of our competitors in shaping markets for new products and services.
Peat free compost, energy efficient refrigeration, organic pest control – all these are products our stores did not stock until an understanding of the environmental issues led us to investigate alternatives to existing product lines.
In a highly competitive retail market, it is important to be able to identify challenges and opportunities before our competitors. If we can do this we can help to shape the way the markets for our products are moving.
The business case for action
Saves costs
A great deal of environmental management is simply about reducing the amount of resources we use, or using them more efficiently, to reduce the amount of waste we produce. Tackling climate change, for example, means reducing the amount of CO2 (and other greenhouse gases) we produce when we burn fuel in our vehicles or use electricity in our stores and offices. The best way to do this is to use energy as efficiently as possible, providing cost savings for the business. The same goes for reducing waste in our stores – the cost of disposal goes down as the volume of waste decreases.
Anything that improves staff recruitment, morale and retention increases the quality of our customer service and saves costs. We can take these savings even further if we encourage our suppliers to follow our example, so we can continue to provide great value for our customers and investors.
Brand
The reputation and behaviour of any operating company can enhance the overall reputation of the Group. If badly managed it can also damage not only the Group’s reputation, but that of all the other operating companies.
A good reputation depends on keeping the respect, trust and goodwill of not only our customers and shareholders, but all the people who have an influence over our ability to run a successful business: employees, suppliers, investors, politicians, campaign groups, local communities across our supply chain - to name but a few. Our ability to manage our perceived impact on the issues important to our stakeholders will be fundamental to gaining the trust of our customers.
32/33
CONSEQUENCES OF INACTION
Planners reject our stores
Respect and loyalty
High calibre suppliers
We manage issues
Ready for future
Better than our competitors
Prioritising the issues Challenges of social responsibility in a global company
We cannot tackle all the issues we have identified separately (see list on page 8/9). Our approach is therefore to recognise key trends in our planning, each representative of developing themes in the societies in which we operate, and incorporating several individual issues. They all have the potential to affect, either positively or negatively, Kingfisher's ability to do business now and in the future. There is therefore a strong business case for all operating companies to devote time and resources to addressing each of these trends.
Operating companies will, however, have to set their own orders of priority. They will do this based on an understanding of which trends present the greatest threats or opportunities to their business and where they can have the greatest impact.
But operating companies do not work in isolation. Because we are all part of one group, the actions of one company will impact directly and indirectly on all the others. There will therefore be a minimum level at which all companies in the Group will need to address each of the trends, to protect the reputation and business strategy of Kingfisher as a whole.
34/35The 12 trends are:
EVERY PRODUCT WILL SOON BE TELLING A STORY - AND THEY ALL NEED TO BE GOOD
Our customers increasingly regard us as having responsibility for everything to do with the products we sell. Every product we sell has a story. The first chapter describes its journey from raw materials, through factories and stockrooms, and into our stores. The second chapter follows the product to our customers' homes and into use. The final chapter describes the disposal of the product, followed by possible refurbishment and re-use, before final disposal or recycling.
These stories are becoming easier to tell and are arousing greater interest. Our customers can all too easily see how our products are being made - by watching television, reading books and newspapers, or visiting Internet sites. To avoid any risk of being embarrassed or ashamed by what they discover we have to ensure that we know about each stage of the story and understand all the significant impacts. Then we can take whatever action is necessary to create a story we can take pride in. This is never going to be easy. There are simply too many products on our shelves, and too many issues to come to terms with. But we must continue to work with our suppliers, and our other stakeholders, to set sensible priorities and reduce the uncertainties.
THE WAY WE TREAT ALL OUR PEOPLE IS BECOMING MORE IMPORTANT THAN EVER
Our ability to serve, employ and buy products from people across the world will increasingly depend on our ability to understand and work in harmony with diverse groups of people. If we can demonstrate that we have taken their needs and expectations into account, we will maintain their custom and loyalty, and earn respect as a responsible company.
Customers and employees alike rightly demand that everyone who works or shops with us is treated with dignity, and has an equal opportunity to access our stores, products and services. Our employees must also be given proper opportunities to achieve their potential. In all aspects of our business, ‘equal opportunities’ must mean exactly what it says if we are to deliver against society’s developing expectations in this important area.
COMMUNITIES WILL REJECT BUSINESSES WHO ARE NOT GOOD NEIGHBOURS
In a world of increasingly competitive retail markets, the trust and goodwill of the local community is becoming a vital ingredient in attracting customers and retaining staff. Being seen to add value and to act responsibly in the communities where we operate is crucial to our business success.
The public is more sensitive than ever to the impacts of business on their local neighbourhoods, and can make their views known forcibly. Together with local and national governments, they are aware of the importance of sustainable development and are looking to businesses to help them implement sustainable solutions to local problems. We need to make sure that we are part of these solutions and not the source of any of the problems. Our aim must be to develop local community involvement programmes that build on our existing skills and deliver real benefits.
A B&Q-sponsored community project in Croydon, England
A supplier’s factory in China
Our customers have diverse needs and expectations
OUR SUPPLIERS NEED TO BE CLEANER AND GREENER TOO
Customers do not want to buy products that have caused excessive pollution during manufacture. They expect us to ensure that our suppliers achieve the same high environmental standards as we do ourselves. This presents a huge challenge for us. Global supply chains are complex, and to achieve uniform standards through them is a big undertaking. However, there is a major incentive for us to take effective steps to help our suppliers manage their environmental impacts. News of a pollution incident anywhere in the world, or poor environmental management at a factory, can travel via television and the Internet to our customers across the world in a matter of minutes. If the factory is revealed to have been making goods for a Kingfisher company our reputation will suffer, regardless of where the fault and legal liability for the situation may lie. This situation may not be 'fair' but it is a fact of life.
WE ARE SELLING MORE WOOD, BUT IT IS BECOMING HARDER TO FIND
There is not enough timber growing on the planet to sustain current patterns of consumption indefinitely. According to Friends of the Earth, if all countries consumed at the level the UK does today we would require at least four planets to supply the amount of wood they would require. Yet the trend is for us to use more and more wood and wood products. Global wood consumption has risen by 64% since 1961.
Consumers are increasingly aware of the link between the wood they buy and the highly publicised loss of rainforest and old growth Northern forests. They want to know that the decking or laminate flooring they buy from a Kingfisher store has not made these problems worse. Schemes to certify timber from well-managed forests already exist. Organisations such as the Forest Stewardship Council provide the reassurance that we and our customers want, and we believe that we are approaching a position where no reputable retailer will attempt to sell timber that is not guaranteed to have come from a well-managed forest. The huge DIY chains in the USA are beginning to match the commitment of the pioneers in this area, like B&Q and Castorama, and seek their own supplies of certified timber. Yet supplies of certified timber are not increasing in line with demand. Forestry is a long-term business and achieving certification can require major changes in practices. We believe this issue will become a source of competitive advantage, which provides a strong business case for us to ensure that we have sufficient supplies of certified timber available for all our requirements.
Certification allows us to trace the wood we sell from the forest …
… to the factory, and finally to our stores.
News of this kind of pollution in our supply chain could damage our reputation
36/37 CHEMICALS ARE CAUSING INCREASING CONCERN AND CONTROVERSY
As a society, we rely on a huge and increasing range of chemicals - both natural and man-made - to maintain our quality of life. As our understanding of human health and environmental science improves, we are discovering new ways in which these chemicals interact with the natural world, and identifying new gaps in our knowledge. There is however a lot of uncertainty surrounding cause and effect, which has fuelled the recent controversies over many chemicals. Some of these concerns have clearly been legitimate. Others appear to have been largely unfounded.
It is clear that the number of chemicals coming under public scrutiny will increase. As retailers, we will continue to find ourselves in the middle of difficult and emotive arguments between groups of people who hold strong but opposing views on the role of chemicals in society. Health and environment campaign groups will put pressure on us as responsible retailers to remove any chemicals suspected of being harmful from our shelves. Yet the chemicals industry will argue that many of these chemicals are essential and that there is no conclusive proof that they are harmful. The only certainty is that doing nothing will not be an option for us.
In response, we must be certain that the actions we take are both appropriate for, and in proportion to, the scale of the problem. We will need to examine and deal with the issues carefully, looking at all the risks to human health, to the environment and to our reputation, and reach our own decisions on acceptable levels of risk and appropriate levels of response.
Our experience has been that where we have taken a pro-active approach - such as VOC labelling of paint at B&Q - the benefits have significantly outweighed the time and costs involved, because we have been able to manage the issue at our own pace. Where have had simply to react to issues for which we were not prepared - such as fine dust and formaldehyde fumes released from sawn MDF - resolving the problem has been more difficult and more disruptive to our business and our customers.
We need to plan what happens when our customers want to dispose of the products they bought from us
Our society is generating ever-increasing quantities of waste. For example, as the number of electrical appliances in our customers' homes increases, the average lifespan of these products is decreasing. Electrical waste is growing three times as fast as domestic waste in the EU and national governments are now looking to retailers to take back waste products. Some of our electrical chains are already required to charge a levy on the appliances they sell, to cover the costs of disposal.
We therefore need to develop innovative ways to help our customers to deal with waste products. We are already attempting to develop products which can be recycled and we provide advice about the best way of disposing of certain products. This trend needs to be extended to all our product lines.
Clear product labelling helps customers make better informed choices
A typical levy charged on electrical goods in Belgium
PACKAGING WASTE WILL BECOME A BIGGER FINANCIAL WASTE
As part of the pressure to reduce waste, retailers and producers are increasingly being held responsible for product packaging. This is adding significantly to our business costs - this year B&Q could spend up to £1 million to meet its obligations under UK packaging laws, in response to the EU packaging directive.
In the next ten years, the most cost effective way of managing packaging waste will be to make sure we do not produce it in the first place. This will mean developing new ways to transport and store products, for example using reusable toteboxes, and developing disposable packaging materials that are recyclable or biodegradable.
WE WILL BE JUDGED BY THE WAY THE PEOPLE WHO MAKE OUR PRODUCTS ARE TREATED
Competitive pressures and demands for cheaper products are leading almost all businesses to source products and raw materials globally. Yet the public does not trust multinational companies to source responsibly. As retailers, we are being held more and more accountable for the working conditions of the people who make our products. Media reports have shown appalling conditions and child labour in factories in the developing world, making products for sale in the developed world. As a result, any company sourcing from the developing world is regarded with suspicion. But the concerns are not all about exploiting producers in far corners of the globe. There are ‘sweat shop’ scandals in developed countries too. Multinational companies are also regarded as damaging their home economies by not sourcing products locally.
In response to these concerns some retailers now insist that their supplier factories are independently certified against agreed standards. Other companies have drawn up codes of conduct and use local auditors to check compliance. These approaches do provide some reassurance, but there are no simple answers that we can apply in every circumstance.
We need to be trusted to buy products wherever we choose and we can only do that by achieving and maintaining good working conditions in all the factories where our products are made. That is what our customers want us to do. It is also what we want to do because clean, safe factories, where the staff are treated with dignity, produce the high quality products we need. The most effective way of achieving this is for us to develop constructive partnerships with local factory owners and managers. Where standards are low we believe it is more responsible to offer help and encouragement than to threaten to walk away. Our experience is that standards can be raised more effectively through inspiration and education than by imposing conditions which may appear arbitrary or unreasonable. With our global expansion in places like China and Taiwan, the people we help by improving their working conditions could soon also be our customers - and we must treat them with respect.
A typical dormitory for workers at a Chinese factory
Baling cardboard makes it cheaper and easier to transport and recycle
38/39 MOVING MORE STOCK IS GOOD - MORE TRAFFIC CONGESTION IS BAD
Over the next 20 years, car traffic could grow by more than a third. In the EU, growth in passenger and freight transport currently outstrips growth in GDP, with freight transport growing fastest. Increased congestion in and around urban centres means a less reliable distribution network, adding to the cost of transport and undermining our competitiveness, particularly in towns and cities, where congestion is worst. Air pollution resulting from increased congestion in urban areas is also thought to contribute to respiratory problems such as asthma amongst vulnerable groups.
To ease these problems, local authorities are increasingly reluctant to grant planning permission for offices and stores, unless transport mechanisms which do not rely on cars are included in the plans. Wherever we are in the world, concerns about congestion and health will continue to be important to the local communities around our stores. Incorporating environmental and health concerns into our distribution and store siting strategies will make our logistics more efficient, and make sure we don't make existing traffic problems worse.
CLIMATE CHANGE EQUALS CHANGES TO HOMES - APPLIANCES WILL CHANGE TOO
World energy consumption almost doubled between 1970 and 1999. It is projected to rise by 59% between 1999 and 2020. The majority of this increase is likely to be met by burning oil and coal to produce electricity. Yet burning fossil fuels such as oil and coal is one of the biggest sources of carbon dioxide (CO2), and contributes to climate change through global warming. The consequences of climate change - flooding in low lying areas and shifting of climate zones which will affect plant growing seasons - have already led some governments to tax energy use in order to encourage a reduction in CO2 emissions. Energy use in our businesses is likely to bear increasing taxes. B&Q and Comet are already paying an energy tax.
As international agreements such as the Kyoto Treaty strengthen, there are likely to be more financial incentives to use less energy, and to switch to renewable sources such as wind or solar power. The biggest impact on our businesses will be in the products and appliances we sell. An increasing proportion of home improvements will be undertaken to improve the energy efficiency of our customers’ homes. We need to be ready with the products they will need. There will also be commercial benefits in developing electrical products which enable our customers to use energy much more efficiently or to choose alternative forms of energy. This trend is already apparent in energy efficiency labelling, but we will see it become a major element in customer choice as the measures that will be taken to reduce climate change begin to bite.
WHEN WE THROW RUBBISH AWAY IT TAKES OUR PROFITS WITH IT
As the amount of 'stuff' society consumes increases, so the amount of waste produced increases. Until now it has been possible to dispose of waste that is not reused or recycled in landfill sites, but the amount of land available for these huge holes in the ground is finite, and the public are increasingly concerned about their environmental and health impacts. Incineration is an alternative, but not a popular one. No-one wants to live next to either a landfill site or an incinerator and the costs of waste disposal are set to increase sharply.
In the next 10 years, the 'zero waste' store, distribution centre or construction site will not only be a possibility, but an economic necessity. To get there, we need to learn how to produce less waste, and how to deal creatively with the waste materials we produce, through reuse by stores or local charities, or recycling to form new products (such as the recycled plastic trellis some of our stores already sell).
Old appliances waiting to be recycled Traffic congestion is an increasing problem in the towns and cities we serve
The ‘ladders’ Our way of managing the trends To be successful, we need to make sure that all operating companies have the same approach to social responsibility, not in what they do but in the principles and thinking that underpin their actions. One of the main challenges for Kingfisher is to develop a strategy flexible enough to accommodate the differences between our businesses whilst reflecting a common vision.
In order to manage this complexity we have developed a series of twelve ladders – one for each of the twelve trends we have identified in the previous section of the plan as being of critical importance to our business. Each ladder has four rungs, corresponding to the four different business positions each operating company could choose to take in response to that trend.
The four rungs are:
1
2
3
4
LEADERSHIP Companies on this rung will be actively involved in the debate on that particular trend or issue. They will be recognised as ‘best in class’ and making a significant contribution to the overall discussion in society.
CREATING AN OPPORTUNITY Companies on this rung will have used the trend to create a business opportunity, whether from cost savings, an improved marketing position or in some other way.
MANAGING THE ISSUES Companies on this rung will be managing the trend in a positive and comprehensive manner. They will have a good understanding of how the trend will affect their products, processes and people and be willing to discuss the issues with interested parties.
MANAGING THE RISK Companies on this rung will take a reactive approach, implementing only those actions which are essential to protect their business from current trends.
40/41
Example ladderActions required by each operating company
Operating companies are asked to look at the twelve trend ladders in the context of their own business, in their own market. They then need to do four things:
Define the actions which would be appropriate to each rung of each ladder. Even though they may not intend to reach the higher rungs on some of the ladders, they should still define the actions which would be required to achieve each rung.
Determine their current position on each ladder.
Decide the position they will seek to achieve and the appropriate time scale for doing so.
Produce an action plan for discussion with the Kingfisher Social Responsibility Team.
The ladders are outlined here, with a completed ‘generic’ ladder. When completed the ladders will allow us to plot progress across the Group and enable the Board and the companies to see at a glance where we are doing well and what further steps are necessary to achieve our aims.
GENERIC CRITERIA, ON A NATIONAL LEVEL, FOR SOCIAL RESPONSIBILITY TRENDS
LEADERSHIP Actively involved in the debate and recognised as ‘best in class’.
OPPORTUNITY Using the trend to create a business opportunity.
MANAGING THE ISSUES Managing the trend in a positive and comprehensive manner. Willing to discuss the issues with interested parties.
MANAGING THE RISK A reactive approach, implementing only those actions which are essential.
Actively involved in the debate
Publicly recognised as best in class in this area by a third party
Social responsibility and sustainable development is an integral part of company strategy
Achieving commercial benefits from environmentally improved products and using external communication to promote brand and generate sales
Creating a feeling of pride and loyalty through staff awareness of company actions in this area
Reducing operational costs by managing environmental issues
Promoting brand awareness through social responsibility communication
Maintaining close working relationships with suppliers, leading to improved co-operation and a more integrated supply chain, and to innovation in products and/or operations
A systematic approach to reducing environmental impacts
Staff training includes environmental and social issues
Suppliers’ audits completed, following company guidelines
Undertake projects tackling specific aspects of issues
Ability to provide customers with information regarding the environmental impact of products
Ability to communicate with stakeholders
Ability to offer alternative products when a significant environmental impact has been identified
Identification and evaluation of risks to business in this area either because a product or operation is harmful or controversial
Conscious decision on actions having evaluated business risk
42/43 he way we treat all our eople is becoming more mportant than ever
Every product will soon be telling a story - and they all need to be good
Communities will reject businesses who are not good neighbours
Our suppliers need to be cleaner and greener too
We are selling more wood, but it is becoming harder to find
To be completed
GENERIC CRITERIA, ON A NATIONAL LEVEL, FOR SOCIAL RESPONSIBILITY TRENDS
LEADERSHIP Actively involved in the debate and recognised as ‘best in class’.
OPPORTUNITY Using the trend to create a business opportunity.
MANAGING THE ISSUES Managing the trend in a positive and comprehensive manner. Willing to discuss the issues with interested parties.
MANAGING THE RISK A reactive approach, implementing only those actions which are essential.
Chemicals are causing increasing concern and controversy
We need to plan what happens when our customers dispose of products they have bought from us
Actively involved in the debate
Publicly recognised as best in class in this area by a third party
Social responsibility and sustainable development is an integral part of company strategy
Achieving commercial benefits from environmentally improved products and using external communication to promote brand and generate sales
Creating a feeling of pride and loyalty through staff awareness of company actions in this area.
Reducing operational costs by managing environmental issues
Promoting brand awareness through social responsibility communication
Maintaining close working relationships with suppliers, leading to improved co-operation and a more integrated supply chain, and to innovation in products and/or operations
A systematic approach to reducing environmental impacts
Staff training includes environmental and social issues
Suppliers’ audits completed, following company gu