1998 environment report - morningstar, inc

J Sainsbury plc1998 Environment Report

Contents1 Group Chief Executive’s introduction

Scope of this report

2 Integrating environmental management into our business

4 Environment policy

5 Our effects on the environment

6 External and internal influences

8 Environmental Goals and Targets

10 Responsible food sourcing

12 Offering customers choice

14 Sound sourcing for home improvement

16 Transport: our products on the move

18 Energy use in our business

20 Waste management

22 Property and store operations

24 Environmental Performance 1997/8

36 Verifier’s report

Inside Back Cover Glossary

Facts about our businessFounded in London in 1869, J Sainsbury plc is one of the world’s leading retailers, operating 3 separate store chains in the UK,

a supermarket chain in the USA and a bank in the UK. The Company serves over 14.2 million customers a week. The total

turnover for 1997/8 was £15.5 billion. The four retail businesses employed 174,000 full and part-time colleagues at the end

of the financial year 1997/8.

Sainsbury’s Supermarkets Ltd, the largest of the retailing businesses, serves 9 million customers a week at 392

stores (total sales area: 10.8 million square feet) throughout the UK and represents about 75% of total sales. Some 371

of these are in England, spread across the country from Truro to Whitley Bay. There are also 9 in Scotland, 8 in Wales and

4 in Northern Ireland. Sainsbury’s also has 195 petrol stations. A large Sainsbury’s supermarket sells over 23,000 products

with Sainsbury’s own brand products accounting for about 40% of the lines.

Sainsbury’s Savacentre, Sainsbury’s large store format, comprises 13 stores, all with petrol stations. The stores serve

over 1 million customers a week and sell over 60,000 products including food, clothing, household goods, toys, gardening

and electrical products. Sainsbury’s Savacentre has a total sales area of 1.1 million square feet.

The Homebase chain of home improvement and garden centres has 298 stores (total sales area: 11.2 million square feet)

throughout the UK. Homebase serves more than 1 million customers a week and a typical store stocks over 20,000 home

improvement and gardening products with a growing emphasis on lifestyle and decorative goods.

Shaw’s Supermarkets Inc. operates a chain of 125 stores (total sales area: 4.3 million square feet) in New England,

USA. The business serves over 2 million customers a week and sells over 50,000 products of which just over 10% are own brand.

Sainsbury’s Bank, a 55%-owned joint venture with the Bank of Scotland, opened for business in February 1997. It offers

a direct, 24-hour telephone banking service. Since its launch it has attracted 850,000 customers and £1.6 billion in deposits.

Sainsbury’s owns and manages 5 Regional Distribution Centres at Charlton in south-east London; Basingstoke, Hampshire;

Buntingford and Hoddesdon, Hertfordshire; and East Kilbride in Scotland. A further 17 contractor-managed depots serve

Sainsbury’s and Homebase.

Group Chief Executive’s introduction

1

In the two years since we published our first Environment Report we have made a great deal of progress. We’re better at building eco-efficient practices into our businessand better at tackling the environmental impact of our transport operations, wastemanagement and energy consumption. Our commitment to encourage betterenvironmental practices among our suppliers shows on our shelves: we have seen a substantial increase in the amount of organic food; made good progress with ourIntegrated Crop Management programme to support the responsible use of pesticides;and we are selling greater quantities of Forest Stewardship Council-endorsed timber inHomebase.

In my view, however, our most significant achievement has been moving ourenvironmental management system on to a more strategic footing. We have progressedfrom managing many small targets to concentrating on six strategic goals, linked to our three priorities: to reduce the environmental impacts of our products; reduce CO2

emissions; and reduce waste. The clarity of these goals and priorities will contribute tohelping us put sustainable development into action in future years.

We have set up a new Board level committee to oversee the implementation of ourstrategy. Its members represent each area of our business now that Sainsbury’s Bank andour US supermarket business, Shaw’s, have joined our programme. These two companieswill adopt the strategic goals by March 2000.

Reporting our performance is crucial to improving our accountability andtransparency. Reporting also acts as a spur for further improvement of our environmentalpractices. We are looking forward to benchmarking our own performance against othercompanies in our sector as more companies publish environment reports.

We welcome our readers’ views on our reports and we have carried out some researchamong key audience groups to guide us with both the design and content of this report. This year, for the first time, we have appointed external verifiers, PricewaterhouseCoopers,to comment on this report and the quality of our data gathering systems. The verifier’sreport appears on page 36.

Finally, I would like to thank all colleagues whose efforts have resulted in theachievements described in this report. While we still have much more to do, we aredemonstrating that we have a great deal to contribute towards raising environmentalstandards.

Dino AdrianoNovember 1998

Scope of this reportThis report covers the environmentalperformance of the UK retail businesses,namely Sainsbury’s Supermarkets,referred to throughout this report asSainsbury’s, as well as Savacentre andHomebase. The first 24 pages of thereport give an overview of our approachand achievements up until July 1998.However, the more detailed informationon our performance appears on pages24–35 and refers to the Company’sfinancial year from 9 March 1997 to 7 March 1998.

As well as environmental issues, werecognise the increasing importance ofsocial and other issues and address these areas elsewhere. Further informationon our approach to socially-responsibletrading, nutrition and our animal welfareand testing policies are available fromCustomer Relations: 0800 636262 or on our Web Site at: http://www.j-sainsbury.co.uk

Integrating environmental management into our business

2 J Sainsbury plc •1998 Environment Report

Responsibilities

Responsible for:• leading the development of environmental

management• effective issue identification and management.

Ian Coull – Director responsible forenvironmental issues.

GBEC makes recommendations to, andimplements wishes of, the Group Board.

All Group companies represented atBoard level.

Environmental improvements made ineach company, driven by the individualBoards.

Environmental Management Department

Group Board Environment Committee

J Sainsbury plc Board

UK Retail Businesses’ Company Boards

4Management

ResponsibilitiesResourcesProceduresMonitoringReporting

3ProgrammeObjectives

TargetsActionsDates

5Audit and

Review

7Public Reporting

6VerificationSignificance

PrioritiesData

Report

1Environment

Policy

2Environmental

ReviewActivities

EffectsLegislation

Commitment

Environmental management system

3

In the past year we have aligned our Environmental Management System more closely to

our business planning process. Although we think both the Eco-Management and Audit

Schemes (EMAS) and the International Standard ISO 14001 are valuable schemes, we are

waiting for EMAS to be developed for the retailing sector before evaluating it for our own

business. Our present system uses elements of both EMAS and ISO 14001:

Environment Policy Our environment policy will be adopted by all the companies

in the Group, including Sainsbury’s Bank and Shaw’s, by March 2000;

Environmental Review We have reviewed our activities that have a significant

effect on the environment (see page 5);

Programme We have prioritised our environmental aims and have put in place a

strategic approach which has resulted in fewer targets with specific dates (see pages

8 and 9);

Management We have formed an Environment Committee at Group Board level.

In addition to Ian Coull, Group Property Director, who is responsible for environmental

management on the Group Board, Ross McLaren, Chief Executive of Shaw’s, Mike Powell,

Distribution Director of Homebase, Richard Chadwick, Deputy Chief Executive of

Sainsbury’s Bank and Jack O’Brien, Managing Director of Savacentre, are responsible for

environmental issues on their Company Boards. We are setting up a monitoring system

and will regularly report progress against targets at both Group Board and Company

Board levels. Reporting dates will coincide with the business planning cycle;

Audit and Review Our Environmental Management Department tracks our

achievements against our targets and reviews progress to assist in determining

future priorities;

Verification For the first time we have appointed consultants to verify our

environmental performance and to comment on the content and completeness of the

information we present in this Environment Report (see page 36);

Public Reporting We believe that it is good practice to issue a public statement of

our performance. We produce a full Environment Report every two years and an update in

the interim years.

Environment policy


Environment policy for Sainsbury’s, Savacentre and HomebaseWe recognise that virtually all the activities of an organisation or an individual have someimpact on the environment. Our aim is to reduce the impact of our own organisationthrough a programme of continuous improvement.

In this respect our policy is to:

Quantify and monitor all environmental impacts of the business, including newprojects, and set specific targets;

Comply with current legislation and, where practical, seek to meet future legislativerequirements ahead of relevant deadlines;

Integrate environmental objectives into relevant business decisions in a cost-efficient manner;

Require all colleagues to address environmental responsibilities within theframework of normal operating procedures;

Minimise waste, seek to recover as much as is economically practical and ensurethe remainder is disposed of responsibly;

Develop appropriate emergency response plans for major incidents in order tominimise their environmental impact;

Influence suppliers of services and own brand goods to reduce their impact on the environment;

Enhance awareness of relevant issues among customers, colleagues and others whohave an interest in our business;

Publish information on environmental performance.

Revised September 1998

1

Our effects on the environment

5

We looked at EMAS and ISO 14001 and selected 8 categories to help us determine ouractivities that have a significant effect on the environment. Sainsbury’s, Savacentre andHomebase activities are shown below with the associated environmental effects. We aimto have control over our direct effects and seek to influence the indirect effects.

■ UK retail businesses’ activities

■ Supplier and customer activities

■ Direct effects

■ Indirect effects

CATEGORY ACTIVITIES OUTPUTS AND EFFECTS

EMISSIONS TO AIR

WATER USE

WATER DISCHARGES

WASTE

LAND

RAW MATERIALS, ENERGY AND FUEL USE

NUISANCES

NATURAL ENVIRONMENT

C O2 — climate change C O2 — climate change; SOx, NOx and particulates — low levelair pollution Refrigerants — climate change and ozone depletion

C O2 — climate change; VOCs — low level air pollutionSOx, NOx, particulates and VOCs — low level air pollutionMethane — climate changeC O2 — climate change; SOx, NOx and particulates — low levelair pollution Methane — climate change

Use of potable fresh water — a natural resource requiringenergy for supply

Use of potable fresh water — use of natural resources; energyfor supply; local shortagesUse of fresh water — use of natural resources; energy forsupply; local shortages

Diluted chemicals, fuel and oil residues and effluent tosewer — chemical and energy use to clean water; run-offto groundwater and streams — habitat degradation

As above Applied chemicals in run-off to rivers — habitat degradation

Re-use and recycling — cyclic use of materials; waste tolandfill — end of life of materials, use of land

As aboveAs above

Use of sites allocated for development — re-use and useof landSite pollution — land degradation

Use of natural resources — extraction and depletion ofnon-renewable resources Use of fossil fuels — extraction and depletion ofnon-renewable resources As above

Use of natural resources — extraction and depletion ofnon-renewable resources Use of fossil fuels — extraction and depletion of non-renewable resources As above

Local disturbance to people and wildlife — reduction in qualityof life and habitats As above

Sourcing from cultivated and natural environments — speciesand habitat depletion

Sourcing from cultivated and natural environments — speciesand habitat depletionApplication of chemicals — species and habitat degradation

Energy use in our business Transport of goods; business travel

Refrigeration (products in transit and on sale);air conditioning

Manufacture of own brand products Sale of fuel to customersAgricultural productionCustomer travel to stores; employee travel

Organic waste to landfill sites

Cleaning in-store and vehicles, toilets, garden centreirrigation, as an ingredient, car washes at stores

Supplier activities

Agricultural production

From cleaning in-store and vehicles, toilets, gardencentreirrigation, customer car washes; water run-off;accidental spills

Supplier activitiesAgricultural production

Damaged and unsold products, packaging, waste fromoperations and construction

Supplier activities Use of products and packaging

Construction of stores, depots and offices

Accidental leaks and spills

Materials and products for use within the business;constructionEnergy use in the business

Transport of goods; business travel

Manufacture of own brand products

Customer travel to stores; employee travel

Sale of fuel to customers

Noise from construction, deliveries, and businesses

External lighting; litter on site

Sourcing of natural materials and products for our use

Sourcing of natural materials for own brand products

Agricultural production

2

External and internal influences


Like any major business, our environmental agenda is shaped by external influences. The 4 key drivers of our environmental programme are:

• our own environmental management strategy;• legislation;• consumer concerns;• pressure from non-governmental organisations (NGOs).

Our own environmental management strategyWe are developing a more strategic approach and increasing the involvement of ourcolleagues in meeting our goals. Our Energy Team has trained colleagues in energy saving techniques (see page 19) and those at Sainsbury’s are engaged in Stockwise, a programme to eliminate waste (see page 20). In addition to regularly reporting ourenvironmental achievements in our house magazine, the JS Journal, we have started todevelop a communication process for those employees whose agreed personal businesstargets include specific environmental targets. We have already held two seminars in 1998 to help them develop action plans and increase their understanding ofenvironmental issues.

We continue to champion the spread of best practice. We have published 12 Best PracticeGuides and distributed them to nearly 3,000 managers. In addition, our DistributionDivision has relaunched its 4 regional environment best practice groups involving50 people from 18 depots, including those owned by contractors but managed forSainsbury’s. Colleagues at our Basingstoke depot are implementing EMAS, which webelieve will result in this site being the first retail distribution depot in the world to becertified to this standard.

Our commitment to environmental reporting is a major part of our strategy. To assist uswith this, our third report, we carried out 36 interviews, drawn from key internal andexternal audiences – store and office managers, UK government, local authorities,consumer and environmental groups, the investment community and media. We have triedto respond to their comments on how the report could be improved by designing it in2 clear sections. The first section provides overview information, while the second givesgreater detail about our performance and achievements. Our interviewees also requestedthat we explain where in the life cycle of our products and business we are focusing ourefforts for improvement.

The case studies in the overview section are identified by their place in the production lifecycle showing the impacts we are focusing on, whether at source with suppliers, in thestore, or with customers, as shown on pages 10 to 23.

Source CustomerStore

2

7

LegislationWe take compliance with the law extremely seriously in all parts of our business andenvironmental management is no exception. However, we believe this is only a startingpoint and we often seek to go beyond what the letter of the law requires. We had noprosecutions on environmental issues in 1997/8.

In addition to complying with legislation, we respond to government consultationdocuments and participate in industry working groups on strategic environmental issues.Sainsbury’s contributed to the report on climate change by the Advisory Committee onBusiness and the Environment (ACBE). This was part of the UK Government’s response tothe need to reduce CO2 emissions in preparation for the international agreement at theKyoto climate change conference in December 1997. In addition, our membership of theGovernment’s UK Biodiversity Group resulted in our developing the Farm BiodiversityAction Plan, the first practical application at farm level of the government’s strategy (seepage 11). Key environmental regulations, which will continue to impact on our business in the years ahead, include the Producer Responsibility Obligation (Packaging Waste)Regulations 1997 and the recent Packaging (Essential Requirements) Regulations 1998(see page 21).

Consumer concernsWe regularly survey our customers for their opinions on environmental issues. We use thisdata to shape our policies, for example stocking more organic food (see page 10); sellingcleaner fuels (see page 13) or increasing the number of plastic recycling banks (see page21). Our Customer Relations department answers customers’ queries by phone or letter.Environmental issues accounted for 2% of all queries in 1997/8.

Pressure from NGOsWe engage in dialogue with a wide range of environmental and consumer groups and,where appropriate, work with them to achieve environmental change. For instance, ourwork as members of the World-Wide Fund for Nature’s “1995 Plus Group” (WWF ’95 PlusGroup) is having far-reaching changes on forestry management and sourcing (see page 15).

Sustainable developmentSustainable development is generally defined as meeting the needs of the present withoutcompromising the ability of future generations to meet their own needs. This requiresconsideration of economic progress, environmental protection and social responsibility.This is a difficult concept to translate into practical action so we have signed up to trialThe Natural Step, a methodology developed in Sweden, to take steps to build the conceptof sustainability into our decision making process. Sainsbury’s, one of 10 Pathfindercompanies testing the concept in the UK, is running a pilot project to review thepackaging of its organic product range and seek more sustainable alternatives.

P See page 24 for furtherinformation


Environmental Goals and TargetsThese Goals apply to Sainsbury’s, Savacentre and Homebase but each company willchoose how to implement the applicable Targets. By March 2000 all the companies inthe Group will adopt the Goals and apply relevant Targets.

Goals

1 Environmental Management SystemManage the significant environmental effects over which wehave direct control and seek to influence those of our customersand suppliers to reduce the impact our organisation has on theenvironment.

2 Own Brand Products and SuppliersInfluence our suppliers to reduce their direct environmentalimpacts and improve the environmental quality of own brandproducts through more sustainable sourcing.

3 TransportIncrease the efficiency of transporting our products, and address employee and customer travel, with the aim of reducingCO2 emissions while achieving customer satisfaction andbusiness growth.

5 WasteReduce the waste we produce from our operations, recover asmuch as is practical ensuring the remainder is disposed ofresponsibly. Encourage our customers to recycle whereappropriate.

6 Property and Store OperationsDevelop, design and operate our stores and distribution centresto reduce their environmental impact while achieving customersatisfaction and business growth.

4 EnergyIn our own operations, reduce CO2 emissions from energy forbuilding services through responsible energy sourcing,minimising demand and efficient consumption.

Our three key priorities

• Reduce the environmentalimpacts of products

• Reduce CO2 emissions• Reduce waste

3

9

Targets

3.1 By March 2001, define product miles in our distribution network and continueto develop systems and implement targets to quantify and reduce mileageand increase vehicle fill each year, while achieving required availability.

3.2 By March 1999, ensure all vehicles run on City Diesel for Sainsbury’sdeliveries. Implement methods, where practical, to reduce emissions throughfuel choice, mode of travel and new technologies, while meeting availabilitycriteria, by this date.

3.3 By March 1999, investigate employee travel choices and evaluate existing,and consider new, measures to influence those choices to reduce theassociated environmental effects.

3.4 For company cars by March 2000, using a baseline of March 1997, improvethe average mpg by 10%, reduce miles, hence fuel use, by 10% and checkemissions at each service.

3.5 By March 1999, identify ways to encourage more customers to use modes oftransport other than the private car to travel to our stores, and recommendactions.

3.6 By March 2000, quantify and evaluate the environmental implications ofSainsbury’s offering remote shopping (delivery to home or work, and orderand collect services).

1.1 By March 1999, formalise responsibilities and procedures for environmentalmanagement, incorporate targets into appropriate business plans, and pilot acertified Environmental Management System at a Regional DistributionCentre. By March 2000, develop measures for environmental performancereporting and benchmarking.

1.2 By March 1999, review the application of The Natural Step as a mechanismfor incorporating sustainable development into business strategy.

5.1 Quantify and assess the waste we produce and, by December 1998, developand implement an integrated strategy to minimise the waste we send tolandfill, and maximise cost effective reduction and recycling.

5.2 By March 2001, Sainsbury’s to reduce product wastage through betterordering, packaging and handling by 15%. By March 1999, Savacentre andHomebase to set specific targets for reduction.

5.3 By January 1999, for our own brand products, develop and implement aprogramme with targets to conduct a documented review to minimisepackaging and introduce design for recycling.

By March 1999, reduce cardboard in Sainsbury’s transit packaging by anannualised 20,000 tonnes via reusable plastic crates.

5.4 By March 1999, develop targets and implement a programme to ensurecolleagues recycle waste where a company scheme has been set up. ByMarch 2000, develop new schemes for the remaining significant waste typeswhere practical.

5.5 By March 1999, develop and implement a programme with targets toincrease opportunities for customers to recycle packaging.

6.1 Achieve targeted reductions in the emissions to air from ozone depletingsubstances through a programme of refrigerant choice and management.

6.2 By March 2001, Sainsbury’s and Savacentre will reduce water leakage by50% from a baseline of 1997/8 and, for Homebase, identify measures toreduce water use, including the possible use of rainwater.

6.3 Reduce the environmental impact of the water released to foul sewer, watercourses or groundwater through a programme of appropriate drainage andcontrol measures, and complete this in Sainsbury’s and Savacentre stores byMarch 2001.

6.4 Manage the environmental impact of land, develop policies in conjunctionwith statutory authorities, and reduce future liability through site selectionand remediation. By March 1999, Sainsbury’s will identify trading and non-

trading properties with potential site pollution issues and implement actionplans for each property to minimise long-term liability.

6.5 By March 2000, formalise arrangements for recording noise complaints andimprove the management of noise nuisances, reduce response time onSainsbury’s and Savacentre buildings and equipment to 3 months, and reducecomplaints on construction noise by 50%. By March 1999, share within ourcompanies successful approaches to combating light pollution.

6.6 By March 1999, reduce our environmental impact on the naturalenvironment through sourcing more sustainable materials, and preserve andenhance habitats in our landscaping wherever possible by establishing andsharing best practice.

4.1 Support initiatives to increase the proportion of our electricity use sourcedfrom renewables, from the current 1% to 10% by March 2010 (providing theunit cost remains competitive). Pilot renewables and/or Combined Heat andPower (CHP) for our own use.

4.2 Evaluate innovative building designs, particularly the Greenwich Peninsulalow energy supermarket and, by March 2001, identify measures which can beadopted at other stores.

Demonstrate annual improvements in building environmental performancethrough BREEAM assessments of own build new stores.

4.3 By March 1999, develop and implement a strategy to reduce CO2/m2

by 10% (from a baseline of 1997/8) by 2005, through internalbenchmarking, energy training and technology. Homebase to set its owntarget by March 1999.

2.1 Develop a strategy that prioritises the management of the environmentalimpacts of our suppliers with clear goals, targets and dates, and start toaction by March 1999.

2.2 Enable customers to make informed choices regarding the environmentalimpacts of their shopping and, by March 1999, develop and implement aprogramme to update own brand product environmental labelling.

2.3 By March 1999, ensure all our petrol stations in the UK sell only City Dieselinstead of standard diesel, and at 100 Sainsbury’s stores introduce City Petrol.

Responsible food sourcing


Sainsbury’s is working with its suppliers of fruit, vegetables, meat and dairy productsto address concerns about the environment. We are pursuing long-term programmesto reduce our impact on agricultural land, conserve the countryside and protectendangered species and habitats.

More organicsThe increased interest in organic food in the last 2 years is a signthat consumers support less intensive farming methods. In 1996,Sainsbury’s stocked 42 organic products, now we have over 330.Organic produce is still in very short supply: some 70% of organicfruit and vegetables sold at Sainsbury’s is imported. Our organicproducers club, Sainsbury’s Organic Resourcing Club (SOuRCe), is working to combat this shortage by bringing together UKproducers to develop ways of increasing UK sourced crops. We have started to sell products from farms in transition fromconventional to fully organic status. Our Orkney Smoked Salmonis clearly labelled as produced “under conversion to organicfarming” and provides a market for products at a price that reflectsmore costly organic farming methods.

We believe environmental responsibility must increasingly featurein all types of farming. Our Integrated Crop Management (ICM)and Living Landscape programmes demonstrate how conventionalfarmers can broaden their range of environmentally-responsiblepractices (see case study opposite).

Conventional farmingOur ICM programme, which uses biological and natural methodsfor the selective control of pest and diseases, is now in its sixthyear. Farmers are encouraged to use pesticides responsibly,spraying only when necessary. ICM protocols are now in place for97% of UK fresh produce crop types and 48.5% of overseas freshproduce crop types. All of our UK crops used for packed frozenvegetables now have ICM protocols. Suppliers are required toimplement the protocols where they exist and complete a self-assessment questionnaire. Independent external verification forUK crops was launched in 1998. The majority of Sainsbury’s UKsuppliers have joined the scheme and, by summer 2001, all freshand frozen produce suppliers will have joined and had theirproduction verified. Progress has been slower overseas because

we have limited influence in some countries, especially where wepurchase only a small proportion of a crop. However, we havetaken steps to work in partnership with other European retailers.We helped to form the Euro-Retailer Produce Working Group(EUREP) in 1997 to work towards Europe-wide minimumproduction standards and to develop common guidelines forIntegrated Crop Management.

Sound fishingSainsbury’s has continued to support the development of the Marine Stewardship Council (MSC), an independent,non-governmental organisation working to promote sustainablefishing practices. We have asked all our fish suppliers to reviewtheir fish sources against good fishing practices and are involvedwith 3 certification pilots to test best practice. If the pilots aresuccessful, we could see product on shelf labelled as being sourcedfrom sustainable fisheries in 1999. Our new Sourcing from theWild policy has been valuable in clarifying Sainsbury’s policy onselling shark meat, for example. Two species sold at Sainsbury’swere checked and one is no longer sold as it was defined as avulnerable species according to the World Conservation Union(IUCN) Red List.

Sewage sludgeThe amount of human sewage sludge spread on UK agriculturalland is set to double when a ban on dumping at sea comes intoforce at the end of 1998. We have been consulting with other foodretailers and the water industry to phase out the use of untreatedsewage sludge before 2001 and to ensure that treated sewagesludge is applied safely. We believe that the use of treated sewagesludge on some land for a restricted number of agricultural cropsis environmentally sound provided correct safety procedures arefollowed. We will always act in the interests of our customers and,if we are not convinced that the practice is completely safe, we willask our suppliers not to use it.

7

P See pages 24 and 25 for furtherinformation

CROP TYPES WITH ICM PROTOCOLS – �SAINSBURY’S AND SAVACENTRE ��

%

100

90

80

70

60

50

40

30

20

10

01995/6

74

31

53

88

34

61

97

48.5

72.8

100

1996/7 1997/8

■ % UK fresh produce crop types with��ICM protocols (35 in total)�■ % Overseas fresh produce crop types��with ICM protocols (35 in total)�■ % All fresh produce crop types with��ICM protocols (70 in total)�■ % UK frozen produce crop types with��ICM protocols (15 in total)

The grey partridge, a species particularly vulnerableto pesticides, and the extremely rare fen ragwortare two of the target species in Hainey Farm’sbiodiversity plan being implemented by FredericHologne of G’s Marketing Limited, a Sainsbury’ssupplier, with assistance from Denise Field,from Sainsbury’s.

CustomerStoreSourceI M PAC T S O N :

Wildlife conservation...

Objective:As part of our Living Landscape programme, we want to encourage our freshproduce and livestock suppliers to increase wildlife conservation on their farms.They are working to protect species such as the skylark, the red squirrel, thebrown hare and the ragged robin; and habitats like chalk grasslands which areendangered or declining.

Action:In partnership with the Farming Wildlife Advisory Group and 7 of our leadingproduce suppliers, we developed the Farm Biodiversity Action Plan. Thisprogramme will help to conserve a wide range of the UK’s threatened wildlifespecies and habitats. It puts into action, for the first time ever at a local farm level,practical ways of meeting the objectives of the UK Biodiversity Action Plan.As well as covering the 14 habitats and 116 species identified in the Governmentplan, it also protects local species and habitats chosen by the farmer.

Result:Some 125 Sainsbury’s suppliers have signed up to the scheme and have alreadyestablished new habitats in farm ponds, edges of fields and small woods andspinneys in unused field corners. Both rare and common species will benefit fromthese new habitats.

11

Offering customers choice



Clear labelling ...

Objective:Poor practice in environmental labelling among manufacturers and retailers has damaged consumer confidence in green claims. To help combat this weagreed to trial the Government’s Green Claims Code to improve the quality ofenvironmental labelling, on Sainsbury’s and Homebase’s own brand products.

Action:In the trial we reviewed more than 1,000 of Sainsbury’s own brand products andbegan to remove confusing symbols and simplify wording. Changes includedremoving the phrase “environment-friendlier” from our packaging and removingunqualified symbols, such as a hand cradling the world. In February 1998 wepublicly supported the Government’s launch of the Code and continue with ourprogramme to implement it.

Result:With some 18,000 products from 3,000 own brand suppliers as well as separatepackaging suppliers, change will be gradual. Core products being changed areour Greencare and Revive ranges of plastic and paper products, carrier bags andseveral hundred products packaged in recycled cardboard. The end result will bea better standard of labelling and better informed customers.

�

�FOODS �

• Meat, dairy and cheese�• Fish�

• Fresh fruit and vegetables�• Deli and ready meals�

• Frozen foods�• Canned, cereals and �

dried goods

�

�NON FOODS �

• Detergents and paper products�• Personal care�• Decorating products�• Timber�• Bathroom accessories�

• Electrical goods�• Gardening products

INITIATIVES �• Supplier partnership programmes�

(ICM, Sourcing from the wild,�Biodiversity, MSC)�

• Externally certified products �(Organics, FSC)�

• Recyclate in product�• Reduced packaging�

• Recyclate in packaging

ENVIRONMENTAL IMPROVEMENTS HAVE TAKEN PLACE IN THESE PRODUCT AREAS

13

P See page 25for furtherinformation

Genetically-modified foodGenetically-modified soya (GM soya) is now being used in greaterquantities in food. As a result, Sainsbury’s is joining UK foodretailers and food manufacturers in labelling foods that containGM soya. We believe labelling is essential so customers can choosewhether or not to buy any product containing this ingredient.

We established best practice with the introduction of ourCalifornian Tomato Purée in February 1996 but found labellingproducts containing commodity crops, such as GM soya, moredifficult. At first we were unable to label them because the growersand food manufacturers said they could not separate GM soyafrom conventional versions. To overcome this problem we madesure that we could trace the source of all soya ingredients usedin our own brand products and so are now able to label. We havebeen able to limit the number of products containing GM soyaby asking our suppliers to source identity-preserved non-GM soyafor many of our leading lines such as bakery goods, biscuits, cakesand confectionery. We estimate that GM soya is currently used inabout only 40–50 own brand products but we believe this numberwill decline in spring 1999. In the long term, however, as greaterquantities of GM soya enter the supply chain, the number oflabelled products will rise.

In line with EU regulations and voluntary guidelines agreed by the Institute of Grocery Distribution (IGD), we are currently in the process of labelling products where genetically-modifiedprotein or DNA is present. Labelling of ingredients derived fromgenetically-modified foods in which the DNA or protein is nolonger detectable, such as soya oil or lecithin, is under review.

Cleaner fuelsIn summer 1998, we launched an ultra low sulphur petrol, CityPetrol, improving our offer of cleaner fuels to motorists concerned

about the environmental impacts of motoring. City Petrol waslaunched at 10 central London petrol stations but will be availableat 100 Sainsbury’s petrol stations by March 1999. The petrolreduces emissions of nitrogen oxide, which is most often linked tothe build up of smog, and will keep catalytic converters fitted tomodern cars in peak condition. Drivers of petrol cars make upover 80% of all motorists so City Petrol’s potential beneficialeffects are enormous. It is an addition to City Diesel, an ultra lowsulphur fuel, launched exclusively by Sainsbury’s in 1995, which is bought by over 125,000 Sainsbury’s customers a week, almost50% of our total diesel sales.

Reuse and recycleRecycling and reuse are two of the most popular ways of reducingenvironmental impact. We sell some 20 different products inSainsbury’s that are either 100% recycled or contain an amountof recycled material. The latest addition is our Greencare toilettissue which is made up of 75% post consumer waste paper and25% virgin pulp from Forest Stewardship Council (FSC)-endorsedsources. In addition, we use recycled material for packaging.About 300 of Sainsbury’s 10,000 own brand products and 400 of Homebase’s 8,000 own brand products are packaged in recycled cardboard.

Smartbox, the rigid blue plastic box for transporting shoppingbetween the store and home, can save carrier bag use. Launched2 years ago, Smartbox is now available in 94 Sainsbury’s stores.We calculate the average reduction in carrier bag use is between12% and 15%. This gives an annual saving of 840 tonnes ofplastic or 139,659 gallons of oil. During 1998/9 a further 55Sainsbury’s stores will introduce the boxes. In addition, our PennyBack scheme, which offers customers a penny for every carrier bagthey reuse, is now in its seventh year. In 1997/8 75 million bagswere reused through this scheme saving 900 tonnes of plastic.

Every product we sell has some impact on the environment either in the way it isgrown, transported, used or disposed of. Our job is to ensure that all products areclearly labelled so customers can make choices.

Sound sourcing for home improvement


Sound sourcing practices apply equally to our home improvement business,Homebase. We ensure the products on our shelves are produced to highenvironmental standards. Sometimes that can mean switching the source of supply from one country to another.

Sustaining the forestsHomebase has made great progress in its programme to sourceall timber and timber-based products from well-managed forests.The forests are independently assessed by a non-governmentalorganisation, the Forest Stewardship Council (FSC), which issupported by the World-Wide Fund for Nature. Currently we have450 FSC-endorsed products representing 5% of the Company’stimber by volume and are on target to have between 1,000–2,000FSC-endorsed products on sale by the year 2000.

In 1998 Homebase became the first retailer in the world to stockFSC-endorsed planed timber, hardboard, MDF and wallpaper.The planed timber represents 10% of sales in timber products; the hardboard and MDF represent 30% of their product sector.Approximately 18 of Homebase’s 121 suppliers have some or all of their products certified by the FSC; this includes all ofHomebase’s major timber suppliers. A further 20 suppliers areactively pursuing certification on some or all of their products.In March 1998, Homebase became a member of the FSC.

Sourcing from the wildOur new policy demonstrates our commitment to sound sourcingof products from the wild. Before launching the policy to supplierswe tested it with a supplier of decorative bathroom shells. Wewanted to ensure the shells had not been harvested from the wildpurely for their commercial value but instead were a by-product ofthe sea food processing industry. The supplier evaluated the rangewith the help of the Marine Conservation Society (MCS) and theIUCN. As a result the range was changed to include only specieswhich were by-products of the food industry.

Safeguarding peat bogsPeat, either sold in bags to gardeners or used as a growingmedium for plants sold in store, is a natural resource that is noteasily renewed. We are concerned about this and have beenworking for 2 years to track our use of peat and to bring tomarket reliable alternatives. Currently 12 of the 48 products wesell are peat free and we plan to introduce a further 2, a grow bag and an alternative multi-purpose peat, by the end of 1999.Alternative peat sales currently account for 18.5% of total sales inthis product area. We are now reviewing the labelling and point ofsale information to raise customer awareness of the desirability ofusing peat alternatives.

Labelling paintsWe are working with our paint suppliers to meet the UKGovernment’s target of cutting Volatile Organic Compounds(VOCs) emissions from paint by 30% by 1999. VOCs is thetechnical term for a certain types of solvent used in paints to makethem easier to apply. As the paint dries, the VOCs are released into the atmosphere where they contribute to indoor air pollution.We are labelling paint cans to show VOC levels. These labels willappear on all interior and exterior paints by the end of the yearand will be supported by a customer leaflet.

15


KEY TO TIMBERTRACKER SUPPLIER �RATING SYSTEM ��Rating( Status�

�

■ A!Fully FSC endorsed.�■ B!Operation and sources judged to be “well managed” �!(though not independently verified). �!Or, Supplier of solely recycled fibre products.�■ C!Changes to sources, or more detail, will be required �!before meeting the criteria for “well managed”.�■ D!Response was poor or lacking in essential detail. �!Follow up action is in hand to obtain more �!information.�■ E!Response was unacceptable, whether through total �!lack of information or through stated unwillingness�!to co-operate.� F!Not applicable – no relevant products.� G!Not applicable – no longer a supplier.�■ H!Has not yet responded to the questionnaire.

SAINSBURY’S – PERCENTAGE OF �SUPPLIERS IN EACH TIMBERTRACKER �ASSESSMENT CATEGORY (125 suppliers – May 1998)

■ 2%�■ 33%�■ 28%�■ 18%�■ 10%�■ 9%

HOMEBASE – PERCENTAGE OF SUPPLIERS IN �EACH TIMBERTRACKER ASSESSMENT �CATEGORY (121 suppliers – May 1998)

■ 5%�■ 58%�■ 24%�■ 7%�■ 6%

Sustainable timber...

Objective:A founder member of the WWF ’95 Plus Group, Homebase wanted to increasesubstantially the amount of FSC-endorsed timber offered in its stores.

Action:Working with Mason’s Timber Products, a timber supplier and fellow member of the WWF ’95 Plus Group, Homebase secured the world’s first consignment of FSC-endorsed Swedish timber from forest owners AssiDomän. This involvedchanging the source of our timber supply from Finland, whose timber industryhad not pursued certification, to Sweden, which this year adopted the firstFSC-endorsed national standard in the world.

Result:Homebase pre-packed planed timber went on sale in

March 1998 and brought the number of certifiedproducts in stores to 450. As a result of the

relationship established with AssiDomän,we were able to secure quantities of

paper pulp which was used to makethe world’s first FSC-endorsed

paper products, Homebasewallpaper and Sainsbury’s toilettissue, available in-store inspring 1998.

3.2 million hectares of forestin central and northernSweden were certified bythe FSC in 1998. They arethe source of Homebase’sFSC-endorsed timber andwallpaper and Sainsbury’sFSC-endorsed Greencaretoilet tissue.


Transport: our products on the move



Reducing road miles ...

Objective:Our programme to cut our supply chain costs will also help the environment.We are consolidating delivery systems which will reduce the miles travelled by ourlorries, cut our fuel consumption and reduce CO2 emissions.

Actions:By bringing together our own and our suppliers’ delivery systems we will increasethe number of journeys where lorries travel full and reduce empty running.We are merging our 2 separate distribution systems – primary, which deliversfrom supplier to warehouse, and secondary, which delivers from depot to store.Meanwhile our suppliers are also increasing full journeys by delivering to a depot,collecting a delivery and dropping it at a store on their return to base.

Results:We estimate that we will eliminate at least 1.6 million km this year, cut our fuelconsumption by 597,000 litres and cut CO2 emissions by 1,530 tonnes. Oursuppliers are on target to achieve another estimated 480,000 km reductionthrough this initiative by March 1999.

17


Road transport is the backbone of our business: we use it to deliver goods and for business travel. Most of our customers travel to our stores by car or bus. Our challenge is to operate our transport systems efficiently and to pursue ways to reduce their environmental impact.

Strategic changeSainsbury’s is making strategic changes to improve the efficiencyof its distribution system, save costs and reduce its environmentalimpact. This has meant integrating the supply chain, from suppliersto distribution centres and on to stores. We are joining together ourprimary and secondary distribution systems and have reorganisedour warehousing by region, creating Regional Distribution Centres,so that lorries can deliver to stores more efficiently. We are alsoforming partnerships with our suppliers to integrate collection anddeliveries and reduce empty running of vehicles.

We have been able to cut out many lorry miles by picking up fromsmall suppliers ourselves and delivering full loads to consolidationcentres. We currently have about 80% of fresh fruit and vegetables,60% of chilled foods, 15% of frozen foods and 15% of groceriesentering the distribution system in this way.

In managing our company car fleet we are now encouragingthose eligible for company cars to select smaller-engined vehiclesaccompanied by a cash supplement. In addition, in 1997/8, some262 colleagues, in excess of 10% of those eligible, took a cashlump sum in lieu of a company car.

Road to railWe are increasing the use of rail to transport goods to distributioncentres. We use rail heavily on the Continent, transferring1.6 million km a year to rail. Last year, we began distributinggoods by rail between our Colchester and East Kilbride depotstransferring 200,000 km each year from road and carrying moreproducts per trip. We want to use rail more for long trips and aretrying to do more where the rail infrastructure exists.

Customer travelA significant number of customers want to travel to our storeseither by public transport, by bicycle or on foot. All Sainsbury’sstores are served by public transport and we support more than50 free bus services. We plan to improve the quality of theseservices and encourage their greater use. We are also workingwith pedestrian and cycle groups to improve routes to stores. For example, we are working with the transport pressure groupSustrans to investigate how to link 11 Sainsbury’s stores into theNational Cycle Network.

Our home delivery service, Orderline, is in the early stages ofa trial to test its popularity with customers. We plan to carry outa study on the environmental implications of home shopping.

Increasing efficiencyFinally, we are reducing our impact by increasing the efficiency ofour vehicles. All 154 HGVs in Sainsbury’s owned distribution fleetrun on ultra low sulphur City Diesel and we are in the process ofextending its use to a further 696 contractor lorries.

In addition, by switching to synthetic engine oil for 52 lorries at our Charlton depot we improved our miles per gallon from 6.5 to 7.2 and reduced particulate emissions. The synthetic oil isnow being used in gear boxes and rear axles, which will result infurther improvements, and we are planning to use it at ourBuntingford depot.

HGV DELIVERIES �D ISTANCES TRAVELLED IN 1997/8 �(million km)

100

90

80

70

60

50

40

30

20

10

0Sainsbury’s�own fleet*

21.1

92.1

18.7

Sainsbury’s�contractor fleet

Homebase’s�contractor fleet

CARBON DIOXIDE EMISSIONS ASSOCIATED �WITH HGV DELIVERY MILEAGE 1997/8 �(000’s tonnes CO2)

100

90

80

70

60

50

40

30

20

10

0Sainsbury’s �own fleet*

20.2

98.3

18.4

Sainsbury’s �contractor fleet

Homebase’s�contractor fleet

*runs on City Diesel

Sainsbury’s fleet also delivers the majority of products to Savacentre stores

Energy use in our business


Our business is expanding in line with changing shopping patterns so demand forenergy is growing. We are trying to achieve even greater energy efficiencies and areexploring the potential for renewable energy in our business.

Our energy consumptionEnergy consumption is the third largest cost of running a store, afteremployment costs and rent plus rates. Sainsbury’s, Savacentre andHomebase used 1,582 million kiloWatt hours (kWh) of energy in1997/8, 2% per m2 more than the previous year. This was due toextended opening hours, more stores trading for 24 hours, increasedrefrigeration of fruit and vegetables on the shop floor and theupgrading of former Texas stores to Homebase lighting standards.The total energy bill for our UK stores was £59.08 million.

Saving energyDespite the growth in demand for energy, RealMT, our on-lineenergy monitoring and targeting system, enabled us to make£800,000 worth of savings in 1997/8. Sainsbury’s has, therefore,over the last 3 years, eliminated a total of £3 million worth ofenergy it might otherwise have used. RealMT is now in all 392Sainsbury’s, 9 Savacentres and 20 Homebase stores. We plan to extend it to the remaining 4 Savacentres and another 205Homebase stores by March 1999. Meanwhile, we are identifyingfurther savings through our Energy Awareness Officers (see casestudy opposite).

By joining with 24 other retailers in the Retail Energy EfficiencyClub, launched in May 1998, we will share information on energyuse and work together to evaluate energy saving technologies tothe benefit of all.

Our Distribution Division is also saving energy. At Sainsbury’sNorthfleet depot, owned by contractor Tibbett and Britten, closetemperature control of the refrigeration plant resulted in significantenergy and cost savings. The depot, which delivers frozen food to67 Sainsbury’s stores in south-east England, cut its annualelectricity bill by £100,000 by gradually increasing the cold storetemperature from –28°C to –22°C. Another design feature of thecold store adds greatly to its energy efficiency; the vehicle bays arefitted with airlock-type “rapid cool pods” to maintain the lowtemperatures in the trailers and cold store during loading.

Renewable energyRenewable energy could help us meet our strategic goal toreduce CO2 emissions produced as a result of our energyconsumption.

We are committed to increasing the proportion of our electricityfrom the national grid sourced from renewables from 1% currently to 10% by 2010 and we are piloting the direct use ofrenewable energy.

We have surveyed all our sites for the potential use of wind energyand have identified several suitable candidates. At our proposedGreenwich store, photovoltaic panels, wind turbines and aCombined Heat and Power (CHP) plant will contribute up to a 50%energy reduction compared to a conventional new supermarket.

At our Charlton depot, the novel use of photovoltaic panels topower a refrigerated trailer has demonstrated that, in addition to totally eliminating diesel emissions from the refrigeration unit,reducing noise and saving maintenance costs, the technology is a robust and viable way of transporting fresh fruit and vegetablesto stores. We are currently assessing the results of a 12-monthpilot programme with a view to building an improved vehicle.

19


CARBON DIOXIDE EMISSIONS ASSOCIATED WITH �ENERGY USE AT SAINSBURY’S , HOMEBASE AND �SAVACENTRE STORES (total 737,620 tonnes – 1997/8)

■ Sainsbury’s 609,860#■ Homebase 74,950#■ Savacentre 52,810

PERCENTAGE BREAKDOWN OF �A TYPICAL SAINSBURY’S STORE’S �ENERGY USE (3.2 million kWh per year)

■ Refrigeration 48%#■ Heating and ventilation 18%#■ In-store lighting 14%#■ Other lighting and #.electrical equipment 12%#■ Bakery 8%

Energy action...

Objective:We wanted to involve colleagues insaving energy to try to double theaverage £1 million annual cost savingsalready achieved from our in-storeenergy monitoring system, RealMT.

Actions:To train a network of EnergyAwareness Officers, our Energy Teamcame up with a communicationsprogramme based on the TV show,the X-Files. Around 700 Energy

Awareness Officers now promoteenergy saving and manage theRealMT system at the store. Theycarry out basic energy audits toidentify cost savings and cansanction the installation of simpleenergy saving devices such asrewiring of lights to make themeasier to switch off, or sensors whichonly switch lights on as colleaguesmove about the store. A FreephoneEnergy Hotline was set up to answertheir queries directly.

Results:We have only marginally increasedoverall energy consumption despitegreater demands on the business.Colleagues have contributed to thesavings achieved through RealMTand they have identified a further£400,000 in savings in the first year.Calls on the Energy Hotline haveincreased from 50 to 400 per month.


Waste management



Waste war...

Objective:Damaged goods not fit for sale . . . foodpast its display-until date . . . stolen stock – it all adds up to a big loss. Our Stockwise campaign challenged our127,000 colleagues at Sainsbury’s to cutthat loss by coming up with bright ideas.

Action:They brainstormed ideas to reduce stockloss. These were built in to the store’saction plan and all ideas were sent toHead Office to be shared across thebusiness. The Stockwise campaign was

then launched in our 5 distribution depotsto get everyone involved in preventingdamage to stock and reducing stock loss.

Result:Thanks to teamwork in stores, depotsand head office logistics and buyingdepartments, we are now on course toreduce our waste levels. Colleaguescame up with 1,500 simple but effectiveideas, some of which are now beingintroduced. For example, in store we aredeveloping colour coding on perishable

food to help colleagues improve rotationof stock. Small changes, such asintroducing single banana bags for thesale of loose bananas, are helping avoidwaste. At our Bristol depot, havingidentified that the current warehouselayout actually increased damage togoods, colleagues are now trialling aredesigned system. We’re also workingwith our suppliers to identify areas for action; vehicle loading and outerpackaging for products have alreadybeen identified as areas for improvement.

Waste�minimisation�Better ordering�& product�handling�(Stockwise)

Waste 215,560 tonnes

Donation from�6 stores�30 tonnes

Plastic shrinkwrap�3,100 tonnes

Re-use�Universal Crates�17,410 tonnes�cardboard saved

Recycling�Cardboard�115,640 tonnes

Landfill 79,380 tonnes

21

P See pages 31 to 33 for furtherinformation

Efficient waste management reduces our impact on the environment and saves us money. We want to produce less waste, recover as much as is practical and make sure the remaining waste is disposed of responsibly. We also encourage our customers to recycle.

ReducingAt Sainsbury’s we have improved our data collection, moving froma 5% sample of stores to 22% of stores based on informationsupplied by waste contractors. As a result, although the figures forwaste in this report are greater than those published in 1996, wedo not believe the level of waste has increased, simply that ourdata collection has improved. We are working with all our wastecontractors to further improve the accuracy of this data.

New regulations are helping Sainsbury’s and Homebase focus onreducing their waste. Under the Producer Responsibility Obligation(Packaging Waste) Regulations 1997, we must meet annualrecycling targets for cardboard, glass, steel, aluminium and plasticpackaging based on the weight of packaging passing through theCompany. To ensure we meet our obligations, we purchasePackaging Recovery Notes (PRNs) as proof that we have beenrecycling our own packaging waste. We are also paying formembership of a not-for-profit organisation called VALPAK whichpurchases PRNs for members to meet their obligations bydemonstrating that recycling, equivalent to their total obligation,has taken place in the UK.

The second regulation is the Packaging (Essential Requirements)Regulations 1998. These require that, while taking into accountthe safety, hygiene and consumer acceptance of our own brandproducts, we must minimise packaging and design packaging forrecycling. From January 1999 the regulations will be enforced byTrading Standards Officers who will have the power to prosecutecompanies who do not comply. In the meantime, we have surveyedexisting packaging and are planning to assess all new packaging atthe design stage to make sure we comply.

ReusingThe forthcoming EC Landfill Directive will limit the amountsof biodegradable waste that go into landfill sites. As a result,we anticipate further increases in the Landfill Tax, currently at

£7 a tonne, a further incentive for us to reuse and recycle waste.Working with the charity Crisis FareShare, we have developed a programme to donate food, from Sainsbury’s, which is about to pass its display-until date but still within its use-by date, tohomeless people fed at hostels supported by the charity. After an initial trial with 6 London stores, we are supporting the charityto set up 10 new Crisis FareShare schemes in UK cities by theMillennium. In addition, we have linked up with the charityProvision to donate products from our depots.

For several years, we have been replacing cardboard with reusableplastic crates to reduce cardboard transit packaging. We currentlyhave 1.5 million crates in circulation every week, replacing 17,410tonnes of cardboard a year. As a result of this success, plasticcrates are now being used in other areas and our reusable eggcrates will replace more than 730 tonnes of cardboard thrownaway each year.

RecyclingWe have been trialling composting. Trials at Savacentres atMerton, in south-west London, and Hempstead, Kent, showed thatit is viable to compost waste fruit and vegetables. In addition, ourSavacentre at Calcot, Reading, took part in a project to find outhow to produce good quality compost to use on farmland. Theproject was funded by Entrust, a not-for-profit company set up toadminister the funding of environmental projects with moneyraised by the Landfill Tax. The trial was a great success and hasbeen extended to test year-round conditions. We have alsosecured further Entrust funding to set up a regional trial, involvingother food retailers and farms.

We want to increase customer recycling, where possible.We have substantially increased our customer recycling facilitiesat Sainsbury’s adding 300 paper recycling banks since 1996(162 to 471) and trebling the number of plastic recycling banks(27 to 80) and we expect this number to increase further.

WASTE MANAGEMENT INIT IATIVES WITHIN SAINSBURY’S SUPERMARKETS 1997/8

Property and store operations


Our store development programme reflects our customers’ shopping patterns andfollows the Government’s planning policy. Due to a shift in national planning policyin the last five years, more of our new stores are being built in town centres and onthe edge of town centres. This means some new challenges in the way we build andoperate our stores.

Land managementSome 54% of Sainsbury’s 392 supermarkets are in town centresor on the edge of town centres. Of the 21 new stores we plan toopen in 1998/9, 19 will be in these locations. We have increasedour support for town centre shopping by funding 63 town centremanagers, almost a 6-fold increase over 1996/7, and we areinvolved with over 180 town centre management schemes in the UK.

We are continually examining our range of store formats to meetour customers’ needs. We are developing smaller formats to makethe Sainsbury’s brand available to customers outside of the mainsupermarket shop. We opened our first convenience store,Sainsbury’s Local, at Fulham Palace Road, Hammersmith insummer 1998, and our first store tailored to city centre shopperswill open in Glasgow in spring 1999. We now have 9 of ourCountry Town format supermarkets suited to smaller towns, witha further 7 planned to open in 1998/9. We continue to developsuperstores, where appropriate, in line with planning policy.

Before building on town centre or edge-of-town-centre sites wemay have to clean the land to remove heavy metals or toxicchemicals. To help us develop these sites we have set up our ownone-stop information service and we are pursuing innovativeclearance techniques. Furthermore, at Wheathampstead,Hertfordshire, we cleaned up a previously heavily contaminatedchemical site, which we own but on which we do not intend tobuild. We used novel methods to neutralise the contaminants andtreated materials on site, thereby diverting material from landfill.As a long-term solution we have also constructed a reed bed tohelp treat the groundwater as well as providing a habitat for wildlife.

Store designWe continue with our commitment to assess 25% of newSainsbury’s and Savacentres using the Building ResearchEstablishment Environmental Assessment Method (BREEAM) and

to assess the remainder ourselves. To help us with this task weworked with the BREEAM assessors to produce a user-friendlydesign tool which will simplify the process. The tool will belaunched to our design teams in autumn 1998.

Last year, water consumption per square metre increased by 5%at Sainsbury’s despite our programme of leak reduction, becauseof longer opening hours. At Savacentre, however, averageconsumption increased by 3.3%, once again exceeding theaverage for Sainsbury’s. All Savacentres were due to have a leakand waste detection survey in summer 1998 to identify scope forreduction. Homebase’s total water consumption also increased,by 13%, due to the conversions of former Texas stores which didnot irrigate their garden centres.

RefrigerationWe aim to minimise refrigerant losses through leak detection andgood maintenance practices and to use the most environmentally-responsible refrigerants, avoiding ozone depleting substances. In addition to having leak detection equipment in a store’s plantroom, we have a programme to retrofit leak detection equipmenton the sales floor. During 1998 we retrofitted 40 stores and are on target to complete a further 10 by March 1999, bringing thetotal number of stores with the equipment to 285. We no longerspecify leak detection equipment on the sales floor in new stores,due to design changes which have reduced the likelihood of leaks occurring.

We are increasing our use of alternative refrigerants with improved environmental performance: all new depots now useR717 (ammonia) as the primary refrigerant offering energysavings. At our Kirkcaldy store, where we used ammonia as the primary refrigerant, we have succeeded in matching capital and energy costs with a traditionally built, direct expansionrefrigeration system.

P See pages 33 to 35 for furtherinformation

PREVIOUS USE OF NEW SAINSBURY’S �AND SAVACENTRE S ITES 1992–1998 �(number of sites)

25

20

15

10

5

01992/3

3

10

10

1993/4

15

12

6

1994/5

5

12

3

1995/6

5

6

1

1996/7

7

9

1997/8

3

11

5

■ Previously polluted, ��derelict and/or ��redundant sites�■ Previously developed ��sites in active use�■ Undeveloped sites ��allocated for ��development�■ Undeveloped ��‘Greenfield’ sites

2

REFRIGERANTS USED BY SAINSBURY’S , �HOMEBASE AND SAVACENTRE �(total 859 tonnes – 1997/8)

Refrigerant type and amount � in tonnes �

■ HCFC (R22) 520.6�■ Ammonia 10.6�■ HFC (R134a, R404a and R408a) �& 321.9�■ CFC (R12 and R502) 5.7

Figures are for stores, depots and head offices


Objective:We wanted to design and build aradically new supermarket that wouldsubstantially improve energy efficiencyand also test some new technologies.

Action:Sainsbury’s won, by competitive tenderfrom English Partnerships, theopportunity to build a supermarket onformer British Gas land on theGreenwich Peninsula, site of theMillennium Dome and the plannedMillennium Village.

We are aiming for up to a 50%reduction in energy consumption byusing the following design features:

• earth-sheltered sides to insulate thestore and reduce its visual impact.The building will absorb heat in theday and release it during the night, like a giant storage heater;

• north-facing, double glazed roof lightsto maximise the use of naturaldaylight. They will be fitted withthermal blinds which close at night toreduce heat loss and light pollution;

• underfloor heating using heatgenerated from refrigeration units;

• water, drawn from boreholes in thechalk aquifer at a constant 10°C,

to cool the building in hot weather;• wind power and photovoltaic panels

to power store entrance signs;• a Combined Heat and Power Plant

using gas to provide the store’s mainsource of electricity.

A planning application has beensubmitted to Greenwich BoroughCouncil. If detailed planning permissionis granted the store should be open intime for the Millennium.

Result:We will be closely monitoring the store’sperformance to see how we can applythe technologies elsewhere.

Millennium store...

23

Environmental Performance 1997/8


In this section of the report we have set out our 1997/8 targets and achievements forthe financial year ended 7 March 1998. This year, because we have developed the 6 strategic Goals and 25 supporting Targets (see pages 8 and 9), we have not listeddetailed new targets in this section alongside the achievements for 1997/8 targets.Instead, if a target is continued, or a new target has been agreed, this is cross-referenced to the corresponding supporting Target on page 9. We have also includedkey graphs showing environmental performance and company policies on specificenvironmental issues.

Management

Responsible food sourcing

Integrated Crop Management policy

Integrated Crop Management involves the use of:

– pest- and disease-resistant varieties – regular crop monitoring to reduce the need for pesticides and fertilisers

– crop rotation to reduce the build-up of pests and diseases – enhanced staff training in integrated pest management

– biological control techniques – strategies to enhance the countryside and biodiversity.

– improved crop production techniques

Its aims are:

• to produce quality crops of economic yield through responsible crop management using the best and most environmentally-sensitive

practices available;

• to develop sustainable crop production systems using a whole farm approach;

• to reduce farm inputs, principally pesticides and fertilisers.

Biodiversity on the farm policy

The aims are to promote wildlife and habitats in a productive farm landscape by:

• working in partnership with our suppliers to encourage environmentally-sensitive farming operations, while providing quality crops and

economic yields;

• conserving and enhancing native plants, animals and their habitats in numbers, variety and range;

• contributing to the national and local Biodiversity Action Plans to conserve and enhance endangered native species and wildlife habitats;

• recognising the role of independent experts in contributing to species and habitat conservation;

• communicating to our customers and suppliers the value of natural diversity, and what can and is being done to contribute to it in the

countryside within our supply chain.

ACTION AND TARGETS FOR 1997/8

UK Retail BusinessesTo implement an externally-certified Environmental Management System atBasingstoke depot with a target finish date, 18 months from start.

Remaining 6 Best Practice Guides to be published by March 1998,completing the set of 16. Identify and quantify the business andenvironmental benefits.

1997/8 ACHIEVEMENTS

On schedule to achieve (see Target 1.1)On schedule to achieve certification in March 1999.

Partially achieved2 BPGs published in 1997/8; 3 to be published in 1998/9; 1 under review.Business and environmental benefits identified where possible.

25


UK Retail BusinessesInitiate project to address supplier environmental performance incorporatingthe environmental impacts of products by March 1998.

To have incorporated environmental considerations into all supplier audits by 2006.

Sainsbury’sSeek to extend the principles of the Farm Assurance Programme to suppliersof New Zealand lamb, poultry and eggs and measure progress and report byMarch 1998.

Continue to develop and communicate welfare standards for poultry, venisonand farmed fish.

By March 1998, Integrated Crop Management protocols to cover: 95% of allUK crops; 50% of overseas crops; 72% of all crops.

1997/8 ACHIEVEMENTS

Continued (see Target 2.1)Delay in appointing project manager. However, 871 Sainsbury’s suppliersand 400 Homebase suppliers are already involved in selected product-related environmental initiatives. A project manager is now appointed.

Continued (see Target 2.1)Pilot project now in progress incorporating environmental considerations intolivestock production Farm Assurance schemes.

AchievedSuppliers for all these products are now implementing the principles of theFarm Assurance programme.

Partially achievedStandards for broiler and laying hens completed; remaining standards partlyachieved. Target completion date is December 1999.

Achieved97% of UK crop types; 48.5% of overseas crop types; and 72.8% of all croptypes covered by ICM protocols.(New target agreed within Target 2.1.)


Sainsbury’sTo continue the implementation of a nutritional optimisation and customercommunications programme.

To continue to provide information via free customer leaflets on topicalissues related to the products we sell.

1997/8 ACHIEVEMENTS

AchievedNutrition continues to be integrated into product enhancement andmarketing initiatives.

AchievedSoya leaflet updated; organics leaflet issued; animal testing leaflet reviewedbut withdrawn due to changed policy.

Offering customers choice

NUMBER OF PETROL STATIONS WITH 4STAGE 2 VAPOUR RECOVERY EQUIPMENT

200

180

160

140

120

100

80

60

40

20

0Petrol4

Stations419964

4

Stage 24fitted41996

Petrol4Stations4

1998

Stage 24fitted41998

Petrol4Stations4

1996

Stage 24fitted41996

Petrol4Stations4

1998

Stage 24fitted41998

180

27

195

5113 14*

0 3

4 4

■ Sainsbury’s ■ Savacentre

*1 Savacentre has 2 petrol stations

NUMBER OF PETROL STATIONS AND 4NUMBER WHICH SELL CITY DIESEL – 1997/8

200

180

160

140

120

100

80

60

40

20

0Petrol stations City Diesel sold Petrol stations City Diesel sold

195 189

14* 12

■ Sainsbury’s ■ Savacentre

In 1996, City Diesel was available at 150 Sainsbury’s �and Savacentre petrol stations �*1 Savacentre has 2 petrol stations

4


Peat policy

In goods for re-sale:

• to reduce the use of peat wherever possible;

• to investigate and develop alternatives and to offer choice to the customer wherever practical;

• where it is used, to source peat responsibly so that any extraction minimises damage to the environment and habitats;

• to ensure that peat is not sourced from protected areas such as Sites of Special Scientific Interest (SSSIs) or European equivalents.

For our own use;

• to ensure that, in landscaping, no peat based products are specified as mulches, soil conditioners or soil ameliorants;

• to ensure that container plants do not contain compost that is from SSSIs or European equivalent;

And:

• to inform customers about how our peat policy is being implemented.

Sourcing from the wild policy

• to ensure our compliance with legislation, principally CITES (Convention on International Trade in Endangered Species) and the associated

UK legislation;

• to ensure that no species are on sale if they are defined as Critically Endangered or Endangered within The Red Lists of Plants and Animals

published by IUCN (The World Conservation Union) when not listed in CITES;

• to avoid sourcing from wild populations wherever possible by using alternatives such as farmed stocks or substitutes;

• to ensure that plants and animals are not taken in an uncontrolled fashion from the wild;

• to ensure that where expert independent opinion and research indicates that the wild population is threatened by trade, alternative species

are considered, or action is taken to prevent wild populations being further degraded or threatened;

• to ensure that information regarding the sourcing of products is freely available, in particular, information as to the status of the species or

the verification criteria used, and to encourage labelling of those products which are sourced from the wild.

Timber policy

• to identify the source of all our timber products for resale;

• to eliminate the purchase of timber which does not come from well-managed forests, as verified by independent certifiers;

• to assess and improve Sainsbury’s and Homebase’s performance with respect to sourcing from forests known to be well-managed;

• to ensure that our suppliers remove spurious forest sustainability claims from product packaging, and refrain from labelling products until

the Forest Stewardship Council is in a position to endorse sources and associated labels;

• to inform customers about how our timber policy is being implemented.


Sainsbury’sSainsbury’s to have 55 lines endorsed by the Forest Stewardship Council andcarrying the FSC trademark by September 1998.

HomebaseHomebase to have 500 lines endorsed by the Forest Stewardship Counciland carrying the FSC trademark by September 1998.

1997/8 ACHIEVEMENTS

On schedule to achieveSainsbury’s had 38 FSC-endorsed products on shelf by April 1998, andlaunched the world’s first FSC-endorsed toilet tissue.New target contributes to Target 2.1.

On schedule to achieveHomebase had 450 FSC-endorsed products on shelf by April 1998, andlaunched the world’s first FSC-endorsed wallpaper.New target contributes to Target 2.1.

Sound sourcing for home improvement

27


Complete and circulate a Peat Best Practice Guide by December 1997 tocomplement PeatTracker database.

Trial, identify and promote peat alternatives and extend range of own brandpeat alternatives from the existing range of 5.

SavacentreContinued commitment to identify environmental issues related toSavacentre’s own products, such as clothing, by March 1997.

1997/8 ACHIEVEMENTS

ContinuedGuide delayed due to staff changes, to be issued in 1998.New target contributes to Target 2.1.

Achieved12 peat alternative lines now on sale.New targets contribute to Targets 2.1 and 2.2.

Not achievedTarget to be continued in Target 2.1.

5

39

32

16.8

ANNUAL SALES VOLUMES OF PEAT %AND PEAT ALTERNATIVES %(000’s m3)

250

200

150

100

50

0

1995/6

74

18.6

76.7

141

1996/7 1997/8

■ Bagged peat alternatives�■ Peat alternatives in plants�■ Bagged peat�■ Peat in plants

In 1997 both Sainsbury’s and Homebase’s suppliers have provided additional information on all uses of peat in relevant product areas. In the same period, sales of peat and peat alternatives have increased in line with the growth in garden centre sales at Homebase

M A J O R C O U N TR I E S S U P P LY I N G SA I N S B U RY ’ S �T I M B E R A N D PA P E R P RO D U C T S , �BY P E RC E N TAG E (estimated Wood Raw Material�Equivalent is 703,000 m3 – 1997/8)

40�

35�

30�

25�

20�

15�

10�

5�

0

%

34

20

3637

April 1998

■ Finland ■ Sweden Canada ■ UK �■ Rest of the World (not more than 2% for any country)��Note: Data applies to specific date as is taken froma “live” database

20

NUMBER OF TIMBER AND PAPER PRODUCT %L INES ON OFFER, AND NUMBER WHICH ARE %FOREST STEWARDSHIP COUNCIL ENDORSED

12,000

11,000

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

April 1996

4,233

1 0

6,854

4,108

10

11,674

238

4,083

38

11,569

450

April 1997 April 1998

■ No. of timber and paper products (Sainsbury’s)�■ No. of FSC-endorsed products (Sainsbury’s)�■ No. of timber and paper products (Homebase)��■ No. of FSC-endorsed products (Homebase)��Note: Data applies to specific date as is taken from a “live” database

500

400

300

200

100

0

MAJOR COUNTRIES SUPPLYING HOMEBASE %T IMBER AND TIMBER PRODUCTS, %BY PERCENTAGE %(estimated Wood Raw Material Equivalent is 903,000 m3 – 1997/8)

45

40

35

30

25

20

15

10

5

0April 1996 April 1997 April 1998

12

37

11

54

31

10

45

14

76

18

5

45

1412

7

17

% %

■ Finland ■ Sweden ■ UK ■ South Africa ■ Brazil ■ Rest of the World (not more than 2% for any country)�

Note: Data applies to specific date as is taken from a “live” database

%


Transport policy

• to maximise fuel consumption efficiency having regard to the volume of goods and numbers of people transported;

• to minimise the emissions per employee and per volume of goods sold as much as is feasible;

• to maximise all opportunities to adopt improvements available through technical development;

• to purchase or lease vehicles with optimum efficiency performance;

• to operate vehicles in the most fuel-efficient manner, e.g. journey planning to avoid congestion, and maximising fill;

• to target reductions in fuel consumption and emissions levels, and constantly monitor progress;

• to educate all drivers on fuel-efficient driving techniques, and assist them with technology, wherever possible.

Transport: our products on the move


UK Retail BusinessesProgress the 3-year targets of our Clean Air Charter action plan for cars andpublish the results by March 2000.

Consider options to provide car parking spaces at J Sainsbury plc’s HeadOffice in London.

Transport Efficiency Best Practice Guide and information to becommunicated to company car drivers to achieve better performance.

Sainsbury’sDevelop a performance indicator that quantifies the environmental benefitsof Primary Distribution. Complete research and recommendations byDecember 1997.

The Primary Distribution network to cover 1,000 suppliers and carry 45% ofthroughput by December 1997.

Performance indicator target for vehicle utilisation set at 43.08 litres/1,000cases delivered (+3%). Target to be revised to incorporate new Scottishdepot.

Following fitting of VeMIS to all Charlton vehicles, benefits of Air Tabs to beassessed. If a 4% improvement is achieved, the system to be rolled-out to alldepots by December 1997.

All Sainsbury’s depots to routinely test end-pipe emissions using TES Bretbytest. Charlton testing and all other depots to be routinely testing by March 1998.

1997/8 ACHIEVEMENTS

Continued (see Target 3.4)1. Company car business mileage is not separately measured, but total(business and private) mileage has increased by 7% over 1 year.2. Emission checks for all company cars to be implemented in 1998/9,subject to budget approval.3. Drivers regularly reminded not to use 4-star and super unleaded fuels.4. 1.4% improvement to 30.1 mpg over 1 year for company cars issued withfuel cards (approximately 67% of total fleet).5. 262 eligible drivers have taken cash in lieu of a car, an increase of 55%year-on-year.

Continued (see Target 3.3)Staff travel survey being piloted in one division.

Continued (see Target 3.4)Electronic bulletin board established for drivers. Relevant part of Best PracticeGuide to be posted on this in summer 1998, plus on Intranet when available.

Not achieved (continued in Target 3.1)Measurement of performance will be addressed in Target 3.1.

Not achieved (continued in Target 3.1)Primary Distribution network covers 650 suppliers and 33% of throughput.Work continued within Target 3.1.

AchievedSainsbury’s own depots achieved 42.34 litres/1,000 cases delivered. TheScottish depot is excluded from the target as it is now contractor operated.

AchievedAir Tabs were assessed. They gave no apparent improvement in vehicleperformance and a deterioration in appearance, so they were not fitted toour fleet.

AchievedAll own Regional Distribution Centres are now testing.

29

PRIMARY DISTRIBUTION

2/3 FullFull(new load)

Full(new load)

Empty**

Empty**

Empty*

Empty*

Full Full

P P

PP

PP

P

PPP

1/3 Full

PP

SUPPLIERREGIONAL

DISTRIBUTIONCENTRE

INTERMEDIATEWAREHOUSE

SUPPLIER STORE

SUPPLIER

SECONDARY DISTRIBUTION

Empty*

Full

P

P

PP

P

REGIONALDISTRIBUTION

CENTRE

SUPPLIER STORE

Old system New systemOld system New system

Deliveries may be carried out by the Sainsbury’s vehicles (own or contractors’)or by suppliers’ own vehicles

The distance travelled by an empty HGV (Empty**), known as deviation mileage, is generally shorter than the empty running distance (Empty*) in the old system.%%Primary distribution and secondary distribution are now being integrated, so all HGVs will deliver to and from the Intermediate Warehouses, the Regional Distribution Centres, stores and suppliers.Previously, HGVs were either based at the Intermediate Warehouse (Primary distribution) or the Regional Distribution Centre (Secondary distribution).A number of goods are still directly delivered to the stores by suppliers, this is not shown.

SAINSBURY’S HGV FLEET EFF ICIENCY, �FUEL USE PER UNIT DELIVERED �(Litres/1,000 cases delivered)

50

45

40

35

30

44.044.4

42.3

1995/6 1997/81996/7

Sainsbury’s fleets also deliver to Savacentre stores

SAINSBURY’S HGV FLEET EFF ICIENCY, �CARBON DIOXIDE EMISSIONS FROM EACH �UNIT DELIVERED �(CO2 kg/1,000 cases delivered)

150

140

130

120

110

100

901995/6 1997/81996/7

126

114

109

CARBON DIOXIDE EMISSIONS FROM �TRANSPORT �(total 174,890 tonnes – 1997/8)

■ /CO2 from HGV deliveries%/(Sainsbury’s and Homebase’s %/owned and contractor fleets) %! 136,950�■ /CO2 from UK retail businesses%/contracted company car mileage %/(business plus private use) %! 24,980 �■ /CO2 from refrigeration units%/for HGV’s and from shunters%/at depots (Sainsbury’s and %/contractors) %/12,960 ��

�


Energy policy

• to consume energy in the most efficient, economic and environmentally-responsible ways possible and to minimise waste;

• to apply the latest and best technologies and practices to all aspects of the UK retail businesses’ operations;

• to seek achievable reductions in total energy consumption;

• to purchase energy at lowest cost and continually to monitor and target energy usage in all premises, activities and operations;

• to promote staff, customer and supplier awareness of local and global issues affecting the efficient use of energy.


UK Retail BusinessesGroup Energy Committee to identify the CO2 footprint of the UK retail business.

Sainsbury’sLaunch an Energy Awareness Campaign to reach all stores by March 1998.Campaign target savings: £1.5m or equivalent to 41.6m kWh and 26,000tonnes of CO2.

Target of £1m savings (27.75m kWh, 17,500 tonnes CO2) from RealMT(Monitoring and Targeting system) for 1997/8.

RealMT software to be developed in Head Office.

Complete trial installation of RealMT at a Sainsbury’s depot, by March 1997.

Average static energy consumption in depots to be improved to 6.11 from5.67 pieces/kWh (+7.8%) by 1996/7. 4% improvement achieved, and afurther 3% target set for when boiler replacements occur followingoperational delay.

Review the operational need to implement Lighting Best Practice Guidelineswith the involvement of Regional Distribution Managers.

HomebaseComplete RealMT software Homebase trial and roll-out to all Homebasestores by March 1999 if trials prove successful.

Develop electronic transfer of energy information with Sainsbury’s throughperiod consumption reports by December 1997.

1997/8 ACHIEVEMENTS

AchievedCO2 emissions associated with our energy use quantified.

Partially achieved (continued in Target 4.3)£1.46m savings achieved, approximately 3% of the total bill for Sainsbury’s,equivalent to 37m kWh and 18,000 tonnes CO2. RealMT contributed£800,000 and energy audits identified and corrected £410,000 in wastedenergy. The remaining savings are directly attributable to the activities of thein-store Energy Officers, which the majority of stores now have. Furthermore,Savacentre has joined the campaign, and all Savacentres now have EnergyOfficers as well.

Partially achieved (continued in Target 4.3)RealMT extended to all stores. It has identified a further £800,000 of wastedenergy costs, equivalent to 22.2m kWh and 14,000 tonnes CO2,contributing to the total savings for the target above.

Not achieved (continued in Target 4.3)Trial complete, awaiting evaluation to determine success.

Not achievedRealMT not installed as depot energy use is not suitable for this style ofmonitoring and targeting.

Not achieved (continued in Target 4.3)Energy consumption is 5.94 pieces/kWh. Further 3% improvement has notyet been achieved, as are awaiting continuous rather than interruptable gassupply, to enable a change from dual fuel to gas boilers.

Not achieved (see Target 4.3)Using the guidelines, Distribution Division to review the potential for energysavings through lighting at Regional Distribution Centres.

On schedule to achieve (continued in Target 4.3)Trials were successful and roll-out has commenced.

Not achieved (continued in Target 4.3)Technical problems caused delays in issue of reports. To be initiated in July1998 by contractor.

Energy use in our business

31

Waste policy

• to minimise waste generation through product management;

• to reuse and recycle waste when commercially viable;

• to seek alternatives to landfill for the remaining waste through trials and development of new initiatives;

• to promote staff, customers’ and suppliers’ awareness of and involvement in waste management;

• to ensure all of our waste is disposed of responsibly.


Maintain existing energy consumption levels with changing operational andstore conversion requirements.

Retrofit a Building Energy Management System into all Homebase stores by March 2000.

SavacentreStores and Head Office to make 5% energy consumption saving by March 1998.

Install RealMT at 3 Savacentre stores by March 1998, bringing total to 9 stores.

Retrofit a Building Energy Management System into all Savacentres by March 1998.

1997/8 ACHIEVEMENTS

Not achieved (continued in Target 4.3)Energy efficiency improved but overall energy consumption in kWh/m2 hasincreased by 2.3% due to store format upgrades and increased lighting inselected product areas.

Partially achieved191 of the 298 Homebase stores have a Building Energy ManagementSystem installed. Further installations will be undertaken where economically viable.

Not achieved (continued in Target 4.3)Electricity use in stores in kWh/m2 has increased by 0.6% due to extendedopening hours and more fresh food equipment. Gas data is unavailable dueto a billing error by the supplier. No data is available from our consultants to indicate any change in energy consumption for Head Office.

Partially achievedAll 9 stores fitted with RealMT systems, to go live between May to July 1998.

Partially achieved9 out of 13 stores completed, and 4 delayed. Programme to be completedwithin the next 2 years.

Waste management

ENERGY CONSUMPTION BY SALES AREA 3FOR SAINSBURY’S , HOMEBASE AND 3SAVACENTRE STORES 3(total consumption is 1,582 million kWh – 1997/8)kWh/m2

1400

1200

1000

800

600

400

200

01995/6

1,195

233

1,011

1,227

209

1,185 1,225

214

1,190

1996/7 1997/8

■ Sainsbury’s !■ Homebase!■ Savacentre!%*Partially estimated

*

CARBON DIOXIDE EMISSIONS FROM ENERGY 3CONSUMPTION BY TRADING SALES AREA 3FOR SAINSBURY’S , HOMEBASE AND 3SAVACENTRE STORES 3(total emissions are 737,620 tonnes – 1997/8)kg/m2

800

600

400

200

0

1995/6

583

74

427

600

68

499

604

72

*502

1996/7 1997/8

■ Sainsbury’s !■ Homebase!■ Savacentre!%*Partially estimated

Previously reported data for 1996/7 included billing estimates and errors. CO2 conversion factors differ from those used in the 1996and 1997 reports.



UK Retail BusinessesImplement new procedures for the disposal of product waste throughout theappropriate parts of the UK retail businesses.

Review all recycling facilities offered to customers and their compatibilitywith recycling carried out by local authorities. Identify opportunities forincreasing both the number of stores with facilities and range of facilities.Information exchange on waste weights collected with local authorities to be progressed.

Install 5 engine oil recycling banks in 1996/7.

Complete and report on trial with organic farmers, using compostablematerial.

Sainsbury’sComplete store and depot visits with 100% of technological partners byDecember 1997.

Review packaging through New Product Development System to reducepackaging.

An additional 9 reviews to be conducted throughout 1996/7, to complete apackaging review of 50% of buying departments.

Implement the £1.14m savings identified as a result of the Bakery Review, byMarch 1997.

Review the need to revise the Packaging Best Practice Guide followingintroduction of the Packaging Regulations

Trial laser printer cartridge recycling, review performance and extendinitiative to Head Office. Place articles in “Office Talk” internal newsletter toincrease use at Head Office.

Quantify redundant PCs/printers and find alternative disposal means whenstorage is no longer available.

Continue to monitor progress on waste management at distribution depotsas from 1996.

Replace 20,000 tonnes of cardboard with universal crates by March 1999.

1997/8 ACHIEVEMENTS

Continued (see Targets 5.1 and 5.4)Composting: 3 trials implemented. Trials to be extended.Donation: 6 stores in London and 5 in Southampton donate food to CrisisFareshare and 2 depots donate to Provision.

Continued (see Target 5.5)Number of stores with facilities identified. Database now set up; to bereviewed annually, to identify opportunities for expansion. Discussions beingheld with local authorities.

Not achievedDelayed due to transfer of project to newly-formed waste managementdepartment and lack of finance in local authorities to partner on project.

Continued (see Targets 5.1 and 5.4)Organic farm trial was a success. Now collaborating in regional trial withother retailers. This will include more stores to assess cost effectiveness.

Partially achieved (continued in Target 5.3)Procedure for store and depot visits for approved companies now in place,and visits programme to address packaging issues ongoing.

Continued (see Target 5.3)New Product Development System is being reviewed.

Not AchievedProgramme was discontinued because it was no longer effective andmanageable. Procedures being revised as part of Target 5.3.

Partially achievedProgress and savings were not monitored. Packaging reduction proceduresbeing addressed in Target 5.3.

AchievedBPG reviewed and decision taken not to revise, instead targeted informationprovided as required.

Continued (see Target 5.4)Early trials resulted in quality and use problems, so there will be a retrial ofimproved recycled cartridges. “Office Talk” articles were not appropriate aspurchases are controlled centrally.

AchievedPolicy published. 169 PC’s sold to staff, 130 donated to schools, 24 redeployed, over 3 months. None scrapped. Policy continues.

AchievedAn estimated 2,200 tonnes of cardboard and 600 tonnes of stretchwrapwere recycled by our own and contractor depots. Total waste to landfillestimated as 28,000 tonnes.Continued in Targets 5.1 and 5.4.

On schedule to achieve (continued in Target 5.3)1,500,000 crates in use/week, saving 17,410 tonnes of cardboard per year.

Waste management continued

33

Refrigeration policy

• to use compounds that are free of chlorine, i.e. ozone benign in all fixed new installations;

• to use only refrigerant compounds that minimise global warming;

• to convert from CFCs to the BATNEEC refrigerant available with the emphasis on minimal ozone depletion;

• to minimise the quantity of refrigerant used per system by optimum design and planned maintenance to eliminate any foreseeable loss

to atmosphere, and to maximise the use of recycled refrigerants from existing systems;

• to manage economically the disposal of unwanted or used refrigerant while meeting the requirements of the Environmental Protection

Act 1990.


HomebaseAudit waste arising to identify recycling opportunities to reduce landfillvolumes.

SavacentreRecycling targets:i) cardboard 6,000 tonnes; ii) polythene 50 tonnes; iii) each store to recycle30,000 coat hangers.

Office paper recycling to be extended to remaining 5 stores by March 1998.

Revise monitoring system for paper usage at Head Office, by March 1997.

1997/8 ACHIEVEMENTS

Achieved (continued in Targets 5.1 and 5.4)3,090 tonnes of cardboard/year recycled, 960 tonnes of pallets/year aresold for recycling. Personal computers and items of furniture were donated tocharities and local projects during 1997/8.

Achieved (continued in Targets 5.1 and 5.4)Recycling levels:i) cardboard 6,050 tonnes; ii) polythene 63 tonnes; iii) coat hangers550,000 (target total 390,000).

Achieved (continued in Target 5.4)All stores now recycle office waste paper.

Partially achievedFully achieved by March 1998. Paper purchasing is centrally controlled,enabling monitoring.

WASTE MANAGEMENT INITIATIVES WITHIN 1SAVACENTRE STORES – 1997/8 (tonnes)

Waste generated total 12,178�■ Cardboard recycled 6,050�■ Polythene shrinkwrap recycled 63�■ Biodegradable waste to ��composting trials 35�■ General waste to landfill 6,030111Note: Waste generated is calculated from amounts recycled and amounts sent to landfill

WASTE MANAGEMENT INITIATIVES WITHIN 1HOMEBASE STORES – 1997/8 (tonnes)

Waste generated total 24,160�■ Cardboard recycled 3,090�■ Pallets sold 960�■ General waste to landfill 20,11011A plastics recycling trial has been carried out

Note: Waste generated is calculated from amounts recycled/sold and amounts sent to landfill

�

0 200 400 600 800 1,000 1,200+

Glass

Paper

Metals

Textiles and�Shoes

Total number�of stores

Books

Plastic

Junk mail

Oil

CUSTOMER RECYCLING BANKS AT STORES

■ Sainsbury’s – data for March 1998�■ Homebase – data for March 1997�■ Savacentre – data for March 1998��No Homebase information available for:Shoes, Books and Junk Mail

1,145

59

45

471

48

36

437

49

17

248

43

8018

392 298

80 3

1

124

7

6

1

2

13

Property and store operations



Land

UK Retail BusinessesBest Practice Guide for Contaminated Land to be published by autumn 1996,and to be launched at an internal conference autumn 1997.

Complete data input to contaminated sites database for all Sainsbury’s storesby March 1997.

Expand “Central Unit” support and co-ordination service for all property-related contamination issues to Savacentre, Homebase, and all 5 owned and operated depots.

BREEAM

Sainsbury’s3 stores per year to be formally BREEAM assessed by third party,maintaining the rate of 25% of the number of stores planned forconstruction.

All new stores not BREEAM assessed by third party, to be self-assessed byDesign Team with a target minimum score of 18.

HomebaseAll future own built Homebase stores to be built to BREEAM standards.

Liaise with other retailers to establish a formal mechanism for influencingdevelopers to accept BREEAM criteria, by December 1997.

Refrigerants/halons

UK Retail BusinessesUpdate Group policy following secondary refrigerant trials and publish innext Environment Report with consequent actions.

Sainsbury’sImplement “Operation Jalapeno” towards zero refrigerant leakage and reportprogress by March 1998 on the interim goal.

To install leak detection during 50 store refits. Complete programme byMarch 1999.

Complete programme to replace remaining 9 tonnes of R502 in freezers byMarch 1998. 2 tonnes will remain in integral systems until the end of life of alimited number of chillers.

Complete halon replacement in Feltham and Head Office by March 1998:Head Office areas by December 1997, except Wakefield House 1st floorcomputer room, awaiting space; Feltham and Stevenage Data Centre byDecember 1997.

1997/8 ACHIEVEMENTS

Partially achieved (see Target 6.4)BPG published. Process to be developed to capture feedback.

AchievedNew target agreed within Target 6.4.

Continued (see Target 6.4)Some data gathered on Sainsbury’s depots and Savacentre. Discussionscontinue with Homebase.

Partially achieved3 formal BREEAM assessments carried out for the 18 stores opened in1997/8, achieving between 19–25 credits. (Target score is 18). Continued inTarget 4.2.

Not achievedOf the 18 new stores opened in 1997/8: 3 formally assessed, see Targetabove, and 5 self-assessed by the Design Team, of which 4 scored 18 ormore. A design tool has been developed to simplify self-assessment, and thiswill be launched in autumn 1998. Continued in Target 4.2.

AchievedIn 1997/8, 1 store built by Homebase achieved a BREEAM rating of “verygood”; 9 stores developer-built, so not BREEAM assessed.Continued in Target 4.2.

Not achievedProposals have been issued, and the feasibility is still being determined. Fitting out of stores follows BREEAM principles because the specification isset by Homebase. Continued in Target 4.2.

Continued (see Target 6.1)Trials delayed and therefore update of Group policy was postponed.

Continued (see Target 6.1)Programme in place and continues to work towards Operation Jalapeno’s aim.

On schedule to achieve (continued in Target 6.1)40 retrofits completed. New target agreed in Target 6.1.

AchievedPurchase of 2 Co-op stores added 3 tonnes of R502 to inventory.1 store has been converted to HCFC R408a, and the other is beingaddressed. To be continued in Target 6.1.

Partially achievedRennie House completed March 1998. Wakefield House now has a newinstallation avoiding use of halons. Feltham completed July 1998, Stevenagedelayed, but will commence prior to March 1999.

35


Refrigerants/halons continued

Implement the plan to reduce transport R12 until less than 2% of fridges arestill running on R12, by end 1996/7 by vehicles in Secondary Distribution.

Investigate alternative refrigeration for Distribution Division, as from 1996/7.

SavacentreContinue to monitor usage of refrigerant gases.

Water

Sainsbury’sAt the Data Centre cooling tower, continue monitoring to ensure highmaintenance and water treatment standards, as from1996/7.

SavacentreReduce store water consumption by 5%.

All stores’ drainage to comply with water by-laws. Ensure compliance byNovember 1998.

Establish a management process for monitoring adoption of Ground andSurface Water Protection Best Practice Guide.

Nuisances

UK Retail BusinessesTo implement, by December 1997, a system to record every environmentalcomplaint made against the company.

Sainsbury’sSet up a formal recording and communication system on noise complaintsarising from distribution activities.

1997/8 ACHIEVEMENTS

Not achieved (continued in Target 6.1)By end of 1998, only 2 vehicles will be running on R12, which will be lessthan 2% of the total refrigerant in use.

AchievedPolicy is now to specify ammonia as the refrigerant at Regional DistributionCentres for new build and major refurbishments.

Continued (see Target 6.1)Period reports distributed to relevant management to assist in leak detectionand reduction.

AchievedHigh maintenance standards in place, and water treatment changed fromchemical to ozone.

Not achieved (continued in Target 6.2)A leak and waste detection survey will take place at all Savacentres in Julyand August 1998.

Partially achievedProgramme in place. Continued in Target 6.3.

Not achievedAll relevant managers issued with the BPG. There are no plans to monitor its adoption.

Partially achievedSystem implemented in Sainsbury’s and Savacentre for recording andtracking noise and light pollution incidents, and noise included in RetailManagement Workshop agenda. Continued in Target 6.5.

Partially achievedSystem established. To be implemented from April 1998. Continued in Target 6.5.

WATER CONSUMPTION BY SALES AREA 5FOR SAINSBURY’S , HOMEBASE AND 5SAVACENTRE STORES 5(total consumption is 2.63 million m3 – 1997/8)m3/m2

2.5

2

1.5

1

0.5

01995/6

1.87

0.28

1.65

1.96

0.26

2.272.05

0.3

2.35

1996/7 1997/8

■ Sainsbury’s !■ Homebase!■ Savacentre

NUMBER OF SAINSBURY’S AND 5SAVACENTRE STORES OPENED, 5NUMBER OF STORES BREEAM ASSESSED 5AND NUMBER OF STORES SELF-ASSESSED

20

18

16

14

12

10

8

6

4

2

01995/6

11

5 2

15

7

2

18

3

5

1996/7 1997/8

■ Total no. of stores opened!■ No. of stores formally BREEAM assessed!■ No. of stores informally assessed

STORE

Burton on TrentOswestryLeicester, Oadby

NO.OF BREEAMCREDITS (target is 18 credits)

22/2919/2925/31

YEAR OF STORE OPENING

1997/8

The maximum possible number of credits is 31 for storeswith petrol stations and 29 for those without.

Verifier’s report


To the Directors of J Sainsbury plc The J Sainsbury plc (“the Group”) 1998 Environment Report (“the Report”), covers theGroup’s UK operations comprising Sainsbury’s Supermarkets, Homebase and Savacentre.It does not cover Sainsbury’s Bank and Shaw’s Supermarkets in the USA. The Report is the responsibility of, and has been approved by, the Directors. The information contained in the Report has been subject to an environmental review guided by risk and materiality,carried out by PricewaterhouseCoopers. The objectives of the review were to:(a) assess the scope of the environmental information to be collected for the Report andcomment on its completeness and appropriateness;(b) investigate the robustness of the information gathering framework used to collate data forinclusion in the Report; and(c) examine the Report to assess the reliability and fairness of the information presented.

Basis of opinionIn respect of (a), our work consisted of meetings with management responsible forenvironmental matters, examination of documentation on current environmental policies,practices and performance and review of external environmental issues affecting the UK retailoperations of J Sainsbury plc.In respect of (b), our work consisted of a review of the programme for data collection, analysisand reporting, checking of a sample of the data collected to source and a review of the dataanalysis, target setting and report preparation process.In respect of (c), our work consisted of a review of the Report to confirm that the content wasconsistent with the information gathered during stages (a) and (b).

Opinion“On the basis of the information provided to us by J Sainsbury plc during our review, theReport presents a balanced view of the environmental performance of the Group’s UKoperations, comprising Sainsbury’s Supermarkets, Homebase and Savacentre, and assurancecan be given that the information included is fairly presented and not materially mis-stated.”

CommentsDuring the verification process we have made a number of observations, which have beenreported to management, on the processes used to compile the report and on the widerstatus of environmental management and reporting within J Sainsbury plc. Our maincomments are that:• J Sainsbury plc has demonstrated commitment, at senior and operational managementlevel, to implementation of the Group Environment Policy. The formation of the Group BoardEnvironment Committee reinforces this commitment;• The Group is able to demonstrate a range of operational environmental performanceimprovement initiatives throughout the business and has played a major role in thedevelopment of environmental reporting in the UK retail sector, but further work is requiredto integrate environmental management into wider business processes and to develop morecomprehensive, systematic environmental performance target setting, monitoring andreporting systems;• There is growing external pressure on companies to report on environmental and broadersocial and ethical issues in addition to financial performance. The Group is already activelypursuing initiatives in all of these areas and may therefore wish to consider the benefits ofadopting a more comprehensive and integrated framework for external reporting indue course.

PricewaterhouseCoopers1 October 1998

6

GlossaryBREEAMBuilding Research Establishment EnvironmentalAssessment Method. An environmental assessmentproviding recognition for buildings which have lessimpact on the environment than normal buildingpractice. The method uses a system of creditsawarded with respect to reduced global,neighbourhood and indoor effects.

BATNEEC Best Available Technique Not Entailing Excessive Cost.

CFCChlorofluorocarbons. A class of chemical compoundscommonly used as solvents, aerosols and refrigerants.The gases are chemically inert but, on entry to theupper atmosphere, can decompose and attack(deplete) ozone.

CHPCombined Heat and Power. The heat, a by-product of electricity generation, is also used to provide localheating, rather than it being wasted, so improving theefficiency of fuel use.

EMASThe Eco-Management and Audit Scheme, a formalspecification for Environmental ManagementSystems, it enables an organisation to achievecertification. It is applicable only in Europe and toparticular business types.

EMSEnvironmental Management System. A systematicapproach to managing an organisation’senvironmental effects, to reduce negative effects andincrease beneficial action, with the aim of continuousenvironmental improvement.

FSCForest Stewardship Council. An alliance ofenvironmentalists, industry, foresters, and indigenouspeoples’ groups who have defined general principlesof good forest management. The trademark of theFSC indicates that the wood has been independentlycertified as coming from well-managed forests.

GMGenetically-modified. Products or ingredientsobtained from plants with artificially interchangedDNA sections, either from individuals of the samespecies or from different species.

GWGlobal Warming. The suspected warming of theearth’s surface temperature due to the build up ofCO2 and other greenhouse gases in the atmospherepreventing heat loss.

HalonsInert gases used primarily for fire extinguishing.Ozone damage potential relative to CFCs is 3 to 10times greater.

HCFCHydrochlorofluorocarbons. Chemicals used as areplacement for CFCs in refrigeration. The ozonedepleting potential is 10 to 50 times less than CFCs.Recognised as having a potential global warmingeffect.

HFCHydrofluorocarbons. A non-ozone depleting chemicalused as a CFC replacement. Recognised as having apotential global warming effect.

ICMIntegrated Crop Management uses biological andnatural methods for the selective control of pests and diseases.

ISO 14001An international standard, providing a formalspecification for EMS which is applicable to anyorganisation in any country.

IUCNThe World Conservation Union. A union of sovereignstates, government agencies, and non-governmentalorganisations committed to the conservation ofnature and biological diversity and sustainabledevelopment.

MCS Marine Conservation Society. A non-governmentalorganisation dedicated to conservation andsustainable development particularly for marinespecies.

NOxOxides of nitrogen, usually nitric oxide, nitrous oxideand nitrogen dioxide. NOx from vehicles contributesto the build-up of low level ozone, photochemicalsmog, and atmospheric ozone destruction.

PTPeatTracker. A database and supporting questionnairedeveloped by Sainsbury’s to assess the source of allgrowing media (including bagged products andplants) bought for resale.

RealMTAn on-line energy monitoring and targeting toolinstalled in Sainsbury’s to identify any increases inenergy use and prompt investigation of the cause.

SOxDenotes sulphur dioxide and sulphur trioxide, bothare created as by-products of burning fossil fuels, andcontribute to the formation of acid rain.

Stage 2Stage 2 Vapour Recovery equipment collects thevapour displaced from customers’ vehicle fuel tankswhen they are being filled-up with fuel, reducing VOCemissions to the atmosphere. All Sainsbury’s andSavacentre petrol stations are now built with thisequipment.

TTTimberTracker. A database and supportingquestionnaire developed by Sainsbury’s to assess the source of all timber and timber-based productsbought for sale in-store.

VALPAKA collective scheme to capture, recycle and handlepackaging waste. Includes collection and reporting to the Government.

VeMISVehicle Emissions Management Information System.A system to monitor the fuel efficiency of vehicles.

VOCsVolatile Organic Compounds. Organic compoundswhich evaporate and contribute to air pollutiondirectly or through chemical or photochemicalreactions to produce secondary air pollutants, e.g. ozone.

WWF ’95 Plus GroupWorld-Wide Fund for Nature 1995 Plus Group. A partnership between industry, retailers and WWFwhose members are committed to the independentcertification of forests products.

If you have any comments or questions regarding thisReport please contact:

Alison AustinSenior ManagerEnvironmental Management DepartmentSainsbury’s Supermarkets LimitedStamford HouseStamford StreetLondon SE1 9LLtel: 0171 695 6681

Further information about Sainsbury’s can beobtained from our Web Site at:http://www.j-sainsbury.co.uk/environment

Designed and produced by Pauffley, London.All photography by Steve Bond except: page 1, Ric Gemmell and page 11, fen ragwort (English Nature); grey partridges (Chris Knights).Written by Sainsbury’s Environmental ManagementDepartment.

Printed by The Beacon Press using environmental print technology. The Beacon Press isaccredited to environmental standards ISO 14001and EMAS.

Printed on Evolve Silk paper, made from 75% de-inked post-consumer recycled waste and 25% virginwood fibre from sawmill residues, forest thinnings andforests in Finland, Canada, Spain and Brazil. Recycledpulps are Totally Chlorine Free giving zero AOX level.Virgin pulps are Elemental Chlorine Free giving aresultant AOX level of <0.5kg per 100kg of pulp.

Thanks to: Gs Marketing Limited, Cambridgeshireand colleagues at Homebase, Cambridge; Sainsbury’sRegional Distribution Centre, Charlton, London andSainsbury’s store in Clapham, London.

J Sainsbury plc Stamford House Stamford Street London SE1 9LL

1998 environment report - morningstar, inc

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