Woolworths Holding Ltd.

Stocked full of energy efficiency ideas

Woolworths has big dreams in the Southern Hemisphere. The South African-based retailer wants to be the biggest and best. It came closer to this last year when it expanded into Australia and New Zealand after purchasing David Jones department stores.[1]  At the same time, the company is looking to shrink its footprint and become the most sustainable retailer south of the equator through its Good Business Journey. The company has committed to a 40% (relative) reduction in energy use and emissions by the end of 2015 and is extending its official footprint to include suppliers and customers.

Justin Smith, head of sustainability, explains: “Climate change is an issue requiring urgent action on the part of governments, business and citizens in order to avert the risk of serious damage to global prosperity and security. Woolworths recognizes that climate change is a major issue that the retail sector contributes to—both directly, through our operations, and indirectly, through our supply chains, and at the consumer-use phase of our products and services—and that we have a role to play in both mitigating and adapting to climate change.”

To address climate change, Woolworths is working towards minimizing its carbon emissions, especially in relation to energy consumption. It has established a multidisciplinary and company-wide carbon management program, focussing on energy efficiency and emission reductions across both its direct and indirect operations.

Starting in store

In its own operations, Woolworths has been forging ahead on the Good Business Journey. The company has created its own green building-rating model that is used to classify its stores. To meet “green store” status, a number of initiatives have been introduced, such as the installation of in-store systems that automatically switch lights off after hours. A number of stores are also equipped with automatic doors to efficiently control the temperature. In certain stores, natural lighting is being maximized and waste heat from refrigeration recycled for heating. The company has switched from synthetic gases used in refrigeration that can damage the ozone layer, to safer alternatives in new stores and retrofits. To date, 24 such refrigeration systems have been installed.

Many of the company’s buildings have been given a computerized management system to monitor energy and water consumption so progress towards targets can be tracked in real time.

At the head office in South Africa, solar panels estimated to generate 172,000 kWh of electricity per year have been installed, reducing the emissions from these buildings by an estimated 49 metric tons of CO2 annually.

To date, the company has almost achieved its target of a 40% reduction in energy consumption compared to its 2004 benchmark.[2]  In corporate buildings, a 28% reduction in energy usage has been seen and Woolworths has saved over US$18M from energy efficiency interventions so far.

Pushing the boundaries

Woolworths is focused on building a reliable, resilient supply chain so it can keep its shelves stocked sustainably. With this in mind, the company has rolled out the Farming for the Future program with its agricultural suppliers. To date, approximately 98% of Woolworth’s primary produce suppliers are taking part. The program uses a holistic and scientific approach to farming that uses less water, chemicals and resources, while building soil health and encouraging ecosystems to flourish. It helps suppliers adapt and become resilient to the erratic weather patterns and impacts associated with climate change. Woolworths is also seeing improvements in capturing soil carbon as a result of the Farming for the Future initiative.  

The company is also looking to roll out its “green store” rating model across the value chain.  According to Smith, the company wants to help set up model ‘green’ factories with selected suppliers and work closely with them to find ways to reduce their carbon footprint.”

Upstream savings are not the only area where Woolworths is taking action. By carrying out lifecycle assessments on selected products, Woolworths has been able to map environmental impacts even more broadly. “This type of information allows us to establish what the carbon impact is at different stages of the life cycle of our products and helps us to drive ways of reducing these impacts where we have influence,” says Smith.

Woolworths found that post-purchase consumption has a large impact. So the company now stocks a range of detergents designed to work optimally at 30 degrees, reducing the energy required for washing and saving money for the consumer.

And 48% of Woolworths clothing items now have energy and water saving attributes—for example, ‘green’ jeans created from recycled bottles, which consume less than half the water during manufacture than conventional denim jeans.[3]

Woolworths has also been working to integrate sustainable technologies into the transport fleet. The strategy includes the optimization of routes travelled by the company’s fleet and the use of a vehicle management system. To date, 99% of logistics vehicles have been fitted with a fleet-board vehicle management system that provides real-time information on the operational performance of individual vehicles, fuel levels and consumption. Woolworths has also improved the integrity of temperature management within its vehicles through the deployment of live fridge temperature management and control systems.

Woolworths is already making fast progress towards meeting its targets and the basket-full of measures being implemented and planned will help to continue this downward trend.[4] The vision for Woolworths to be the most sustainable retailer in the Southern Hemisphere is within sight and the company’s commitment to We Mean Business underlines its drive and ambition.

[1] www.theaustralian.com.au/business/david-jones-to-open-in-wellington-in-trans-tasman-takeover/story-e6frg8zx-1227383056339
[2] www.woolworthsholdings.co.za/investor/annual_reports/ar2014/whl_2014_gbj1.pdf
[3] www.fastmoving.co.za/activities/woolworths-recycled-jeans-a-south-african-fashion-first-5055
[4] www.woolworthsholdings.co.za/investor/annual_reports/ar2014/whl_2014_gbj1.pdf

South Africa
Consumer Discretionary