SUSTAINABILITY OVERVIEW

In line with the recommendations of King III, this year we have produced an integrated sustainability report that provides a consolidated review of our financial, social, economic and environmental performance. We have done this by integrating a performance review of our material issues within the sections reviewing our various operations and services, and governance practices.

In this section of the report, we briefly:

review the relationship between sustainable development and our core value drivers;
identify our most material sustainability issues;
provide an overview of our performance on these issues, noting key achievements, challenges, strategic focus areas and commitments, and identifying where these issues are addressed in more detail elsewhere in the report;
outline our approach to managing sustainability throughout the company; and
facilitate comparability, both with our own performance year on year, and with the performance of our peers. We have provided a detailed index in which we respond to each of the “G3” criteria of the Global Reporting Initiative (GRI) and identify in which section of the annual report relevant information on our sustainable development performance is discussed.

LINKING SUSTAINABILITY TO OUR CORE VALUE DRIVERS

As this report is targeted primarily at current and potential investors in the company, our identification of material issues focuses on those issues that can have meaningful impact on our financial performance. As a retail company in the apparel, footwear, sporting and jewellery business we believe that there are various ways in which societal and environmental issues are material to our core business:

Primarily, there are significant implications, both direct and indirect, associated with existing and anticipated government policy aimed at addressing societal, governance and environmental challenges. Examples of direct impacts on our business include the recent regulatory focus on protecting consumers’ rights (typified by the 2009 Consumer Protection Act), new requirements relating to corporate governance practices and the various environmental policy measures (relating, for example, to energy efficiency and waste) that may impact on our activities throughout our value chain.
At a more general level, government policy on social and environmental issues may have broader macroeconomic impacts with resulting implications for our business. For example, certain policy measures will result in increased energy and water prices, leading to reductions in the disposable income of our consumers. Although some areas of our business are less vulnerable than others, a slowing consumer spending environment translates into lower sales growth and a decline in revenue. Adverse macroeconomic conditions could also result in higher-than-forecast bad debt write-offs, which would affect the earnings of our group.
We anticipate that, in time, growing resource constraints will result in increasing raw material and operating costs. Higher energy and fuel costs are seen to be of most material concern to our distribution and purchasing activities, and underline the need for continuing efforts to maximise operational efficiencies. Potential resource constraints and the resulting policy responses may also increase the volatility of the supply and distribution of certain raw materials and products.
As we begin to see greater competition in the local market –including increased activity from international competing brands in the sports and footwear sector, some of whom have positioned themselves very strongly on sustainability issues – we believe that this will increase the potential for environmental and social considerations to provide a source of local competitive advantage, as well as raising reputational pressures. While local clothing retailers have not faced the same level of consumer scrutiny on supply chain practices as our international peers, we anticipate that there will be growing consumer and investor awareness on these issues.
An important source of growth for the company lies in our capacity to develop new stores. The tight availability of sites for new stores may have a negative impact on our expansion programme.
Finally, we recognise that providing an attractive work environment with competitive salaries and associated benefits encourages greater productivity and employee loyalty.

Underlying our commitment to addressing these material sustainability issues is the belief that socially responsible management is symptomatic of good general management. Companies that are more responsive to developments within society tend to be those that are well managed and more successful in the short, medium and long term.

REPORTING ON OUR MATERIAL ISSUES

We have identified our material sustainability issues through a process of internal evaluation and reflection that is informed in part by the outcomes of discussions with our stakeholders. A review of our recent stakeholder engagement activities is provided in the corporate governance section of this report.

Issues that have been raised by our various stakeholders include: building and maintaining shareholder value; demonstrating concern for our employees; promoting broad-based black economic empowerment; and supporting the communities in which we operate. In line with international trends, some of our investors are beginning to show an increasing interest in our approach to managing our supply chain, particularly as regards the maintenance of labour and environmental standards. Enhancing our supplier assessment processes to ensure responsible practice has been a specific focus over the last two years and we are particularly pleased with our progress in this area.

In the table below, we have reviewed how our key activities may have an impact on the social, economic and environmental well-being of the community, and we have identified where in the report further information on these areas can be found. A more comprehensive guide as to where information on different aspects of our sustainability performance may be found in the report is provided in the GRI G3 content index at the end of this section.

Understanding Foschini's sustainability impacts	Section of report
Making a positive contribution to the economy by providing employment, generating business for local service providers, paying taxes and supplying affordable quality goods	Addressed throughout the report; quantitative data in Financial Director’s report and financial statements
Ensuring ethical integrity through transparent corporate governance practices	Corporate Governance report
Providing a safe place of work that rewards and motivates our employees appropriately and that reflects the diversity of the people that shop with us	Human Resources report and Transformation and CSI report
Promoting sound social and environmental practices throughout our supply chain	Group Merchandise Procurement
Ensuring product safety and integrity, for example through clear labelling and marketing practices	Group Merchandise Procurement
Adopting sound environmental management practices in our operations	Environmental and Logistics sections of the services review
Providing resources, time and energy to our corporate social investment programme	CSI activities reviewed in Transformation and CSI report

OUR SUSTAINABILITY PERFORMANCE AT A GLANCE

This section provides an overview of our principal achievements during the financial year under review, and outlines our key challenges and strategic focus areas and future commitments in these areas. It also includes a table of quantitative performance data for the last two years.

Overview of our principal achievements, challenges, and strategic focus areas and commitments

Key achievements

In spite of challenging trading conditions due to the global recession, all our divisions produced satisfying results. A total of 100 new stores were opened and 12 were closed across the group’s 14 trading brands and turnover for the year grew by 6,4%. Positive growth is expected in the next financial year.
Significantly reduced lead times for merchandise procurement and a 64% reduction in stock holding at our distribution centres, as a result of supply chain initiatives aimed at improving efficiencies.
Implemented formalised group merchandise policies and procedures aimed at ensuring a more rigorous assessment of both potential and existing suppliers. This approach includes updated quality assurance and quality control processes, ensuring that all our contractual obligations are being met, including all legal, ethical, environmental, labour, and health and safety compliance. A test phase has been conducted on both pre- and post-approved suppliers.
Levels of local sourcing remain high, with approximately 65% of our ladies’ clothing products being manufactured in South Africa.
Consolidation of our customer relationship management function into a central unit servicing all the retail brands across the group has resulted in increased new customer acquisition, as well as further leveraging of our large customer base.
Total investment spend on employee training and development increased by 42% on last year to R88,4 million.
By reusing 65% of its supplier cartons for distribution of goods to stores, our logistics division achieved a 54% reduction in the amount of waste cardboard produced as compared with the previous year.
Implemented lighting efficiency measures in the majority of our divisions, to reduce our levels of electricity usage. These divisions anticipate a 14% decrease in electricity consumption for existing and all new stores built in the forthcoming financial year.

Challenges and strategic focus areas

Our divisions are confident they are well positioned in terms of the number and quality of existing and planned stores and flexibility of buying processes to withstand a continuation in the current economic downturn and take advantage of an upturn in the market.
South African consumers remain under financial pressure and levels of disposable income have declined. Reduced interest rates are likely to have a positive impact on consumers’ disposable income, however, this will partially be off-set by increased electricity and utility costs.
The group has engaged external consultants to assist with a process of determining a sustainability strategy. This will guide a longer-term process of setting clear sustainability objectives, commitments and performance targets.
Supply chain efficiency initiatives are an ongoing focus. Initiatives launched across our divisions are expected over the next few years to build a supplier pipeline that has greater flexibility and even shorter lead times, thereby improving decision-making and operational efficiency.
Rigorous supplier audit processes to ensure that we only procure from suppliers who adhere to responsible labour and environmental practices. We assist suppliers to meet corrective action required to ensure compliance.
Illegal imports are increasingly impacting on the local supply base in terms of competing on equal footing.
We strive to ensure greater reliance on local manufacture, thereby reducing vulnerability to adverse changes in the exchange rate of the Rand and increasing our contribution to the local economy.
Increasing electricity charges is a challenge. We will complete the roll-out of store lighting efficiencies throughout our divisions in the next financial year and are in the process of implementing systems to enhance the measuring and monitoring of our electricity usage. This will assist with our longer-term aim of setting performance targets for energy consumption.
There is an ongoing focus on investing in talent development to ensure a supply of talent and skills to meet our business requirements; improving representation of previously disadvantaged groups at senior levels remains a challenge.

Commitments for the year ahead

A group sustainability strategy will be developed and implemented.
Our revised and piloted audit process for suppliers will be finalised and all our primary merchandise suppliers will have been audited within the forthcoming financial year to ensure that contractual obligations are being met.
A successfully piloted supplier scorecard will be rolled out to all local and international suppliers.
A comprehensive and fully documented supplier database will be established and maintained to measure and monitor supplier performance. This includes implementing a formalised standard supplier take-on process to ensure consistency throughout the group.
Upstream quality assurance processes will be implemented, both locally and internationally, covering all merchandise categories in which the group trades.
A recently appointed utilities manager will oversee and ensure an enhanced process of measuring and monitoring electricity usage at each of our stores, head offices and distribution centres.
We plan to put in place a BBBEE ownership scheme.
To ensure that targets in respect of skills development are achieved, we will launch an initiative called Project 700, aimed at training 700 sales associates.

OUR SUSTAINABILITY PERFORMANCE YEAR ON YEAR *

Performance indicator	2010	2009
Economic and related core baseline indicators
Turnover (Rm)	8 605,2	8 089,6
Operating profit before finance charges (Rm)	1 972,6	2 025,5
Headline earnings per ordinary share (cents)	521,4	559,5
Dividends declared per ordinary share (cents)	288,0	288,0
Total number of stores	1 627	1 539
Total number of distribution centres	8	8
Total procurement from BBBEE sources (%)¹	53% (2009)	46% (2008)
Number of environmental, health and safety and/or governance legal incidents	None	None
Employee issues
Total number of employees
– Permanent full-time employees	10 494	10 075
– Permanent part-time employees	327	313
– Flexitime employees	3 233	3 103
– Contract employees	550	947
– Casual employees	182	1 029
New jobs created (direct employment only)	1 083	Data not available
Employee turnover (excluding contractors) (%)	33%	47%
Employment equity (% representation of previously disadvantaged groups among permanent employees)²
– Senior management	9,8	7,1
– Specialists and middle management	37,0	13,7
– Skilled technical and junior management	74,0	70,1
– Semi- and unskilled employees	94,2	93,0
Investment in employee training and development
– total expenditure (Rm)	88,4	62,2
– % of payroll	7,1%	6,0%
Total number of employee training interventions	131 166	73 526
Work-related fatalities	None	None
Number of classified injuries
– number of days lost	1 924	1 510
– number of incidents	403	445
– number of incidents where days off were 3 or less	294	349
Number of lost workdays due to industrial action	0	0
Environmental issues
Energy usage (kilowatt hours) (stores, distribution centres and offices)	Data not available	117 639 989
Carbon footprint (tonnes CO₂e)
– total	Carbon	154 051,06
– Scope 1	inventory	3 672,79
– Scope 2	currently	121 169,19
– Scope 3	being calculated	28 645,94
Water consumption (kilolitres) (head offices and distribution centres)³	34 695	33 733
Waste to landfill (tonnes)⁴	79,57	Reliable data not available
Total recyclable volumes per month (tonnes)	146,67	Reliable data not available
Corporate social investment
CSI total spend (Rm)	4,5	4,3

1	Total procurement (not only for merchandise); data is not currently available for 2010
2	Employment equity statistics: Reported annually in October of each year, in line with SA Department of Labour
3	Water usage: Stores were not included as consumption is minimal. Toilet facilities in stores are communal and therefore would fall under the bulk water usage of the mall or facility where the store is located
4	Waste statistics: Statistics cover activities at our Cape Town head offices and distribution centres for the period July 2009 – April 2010

SUSTAINABILITY MANAGEMENT AND STRATEGY

This section provides a brief overview of the various functional units the group has in place to manage its governance, economic, social and environmental performance, and an indication of where in the report further information is provided on these structures and the material issues they address.

The group maintains a systematic and documented risk management process that ensures that all material risks are identified, evaluated, effectively managed and, where practical, quantified. This process is undertaken within each division, as well as by the operating board. The group has a risk committee responsible for ensuring that appropriate risk and control policies are in place and are communicated throughout the group.

The group’s structures and initiatives in place, aimed at motivating a high standard of governance and governance leadership, are detailed in the Corporate Governance report. This includes a review of the roles and responsibilities of the group board and its various committees, including the audit committee, remuneration committee, risk committee and nominations committee. The group audit services division audits all the group’s operations, ensuring sound internal control.

The financial position of the group is overseen by a specialised group finance and administration division which provides centralised support to other divisions and reports to the financial director. Further information is provided in the Group Finance and Administration divisional report.

The management of efficiencies in the supply chain is detailed in the Distribution and Logistics divisional report. The steering committee for this project comprises the chief executive officer, members of the operating board and senior group executives.

The group human resources division is responsible for promoting safety, well-being and talent development in our workforce. The division works in collaboration with the group’s trading and service divisions, whose HR practitioners develop and implement HR solutions in line with their divisions’ requirements within the parameters of the business strategy. Further information is provided in the Human Resources review.

The group’s transformation committee is responsible for driving the group’s transformation strategy, ensuring it is aligned to the DTI’s Broad-based Black Economic Empowerment Act of 2003 (BBBEE) and the associated codes of good practice. Further information is provided in the Transformation report.

Supply chain practices are managed by the group merchandise procurement (GMP) division. This new division is responsible for the strategic development of merchandise procurement from both domestic and international suppliers. GMP is in the process of formalising procedures and norms for supplier assessment, approval procedures and performance measurement in order to ensure that all contractual obligations are being met. Further information is provided in the GMP review.

The group’s environmental committee promotes responsible environmental performance in the group and among its stakeholders. The committee reports quarterly to the chief executive officer and three operating board members. External consultants have been contracted to assist with the group’s longer-term environmental vision. Further information on our environmental performance is provided in the environmental section of the services review.

The group’s CSI activities, funded through the Foschini Foundation, are managed by a senior manager responsible for CSI and employee wellness, reporting to the group human resources director. Further information is provided in the CSI section of the Transformation and CSI report.

Building on our existing structures and systems, we have initiated a process of developing an overarching sustainability strategy for the group, in consultation with external consultants. This will facilitate a more systematic approach towards the planning, implementation, monitoring and reporting of our sustainability objectives and performance.

GRI CONTENT INDEX

The Global Reporting Initiative (GRI) G3 Guidelines provide a recommended framework for reporting sustainability initiatives to stakeholders. The following table provides a detailed response to each of the G3 reporting criteria, and identifies in which section of the annual report relevant information on our sustainable development performance is discussed.

GRI G3 element		Foschini group response/cross-reference

STRATEGY AND PROFILE
1. Strategy and analysis
1.1	CEO statement about the relevance of sustainability to the organisation and its strategy	This is addressed in the CEO’s statement.
1.2	Description of key impacts, risks and opportunities	Key impacts, risks and opportunities are identified in relevant sections of the report, and in the table addressing material risks in the Sustainability overview.
2. Organisational profile
2.1	Name of the organisation	Foschini Limited.
2.2	Primary brands, products and/or services	This is covered in the group’s Corporate Profile.
2.3	Operational structure of the organisation	This is provided in the Corporate Structure section.
2.4	Location of the organisation’s headquarters	Stanley Lewis Centre, 340 Voortrekker Road, Parow East, 7501, Cape Town.
2.5	Number of countries where the organisation operates	The group currently operates in South Africa, Namibia, Swaziland and Botswana.
2.6	Nature of ownership and legal form	Foschini Limited is a public company listed on the JSE Limited.
2.7	Markets served	This is outlined in the group’s Corporate Profile.
2.8	Scale of the reporting organisation	Foschini operates in South Africa, Namibia, Swaziland and Botswana, from a total of 1 627 stores, predominantly in South Africa. Turnover for the year under review totalled R8,6 billion.
2.9	Significant changes during the reporting period	There were no significant changes during the reporting period.
2.10	Awards received in the reporting period	Foschini has for the second year been awarded “best performer” status by the JSE on its SRI Index. Foschini won Best logistics award at the 2010 African Access National Business Awards. The group won a skills award for its field training programme, at the Inaugural Achiever Awards hosted at the Skills and Training Summit in Pretoria.
3. Report parameters
3.1	Reporting period	The reporting period is 1 April 2009 to 31 March 2010.
3.2	Date of most recent previous report	Foschini Limited 2009 Annual Report covering 1 April 2008 to 31 March 2009.
3.3	Reporting cycle	1 April to 31 March.
3.4	Contact point	Addressed in Administration section (inside back cover).
3.5	Process for defining report content	Our most material sustainability issues are identified in the Sustainability overview. Performance reporting on these material issues is consolidated and embedded within the various sections of the report.
3.6	Boundary of the report	The report covers all Foschini’s wholly-owned companies and in all significant aspects, its subsidiary RCS, in which is has a 55% shareholding.
3.7	Limitations	Issues that are currently not being measured or reported on, or for which only partial or derived performance measures are available (such as our carbon footprint), are identified in relevant sections of this GRI table.
3.8	Basis for reporting on JVs	There are currently no joint ventures.
3.9	Data measurement techniques	These are explained where data is provided.
3.10	Explanation of effect of restatements	Provided in notes to the financial statements.
3.11	Significant changes in scope, boundary or measurement method	There were no significant changes. In terms of the group’s environmental performance, the scope of the carbon footprint analysis was expanded to include Scope 3 inventory.
3.12	GRI content index	GRI content index provided here.
3.13	External assurance	External assurance is provided for financial performance only. Foschini is in the process of improving its monitoring of quantitative data relating to its other areas of sustainability performance. Seeking independent assurance of our sustainability reports is not currently deemed to be appropriate.
4. Governance, commitments and engagement
4.1	Governance structure	Addressed in Corporate Governance section.
4.2	Nature of role of the chair	Addressed in Corporate Governance section.
4.3	No. of non-executive members	Addressed in Corporate Governance section.
4.4	Mechanisms for shareholder direction and employee input	Addressed in the Corporate Governance and Human Resources reviews.
4.5	Linkage between compensation and performance	Addressed in the Remuneration report.
4.6	Processes for managing conflicts of interest	This is addressed in the Risk report in the Governance section.
4.7	Process for determining expertise	Addressed in section on the Directorate and in the annex to notice of AGM.
4.8	Internally developed statements of mission or values, codes of conduct relevant to economic, social and environmental performance	This is addressed in the Risk report in the Governance section.
4.9	Risk management procedures	These are addressed in the Risk report in the Governance section.
4.10	Performance evaluation processes	Addressed in Corporate Governance review.
4.11	Explanation of how precautionary approach/principle is addressed by organisation	The precautionary approach relates to threats of serious or irreversible damage to the environment or human health, and requires that lack of full scientific certainty should not be used as a reason for postponing cost-effective measures to prevent environmental degradation or damage to human health. Due to the nature of our activities this has relevance primarily in the context of climate change; a review of our activities on this issue is provided in the environmental performance section and in our Carbon Disclosure Project (CDP) response.
4.12	Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or endorses	The group does not currently subscribe to any such initiatives.
4.13	Memberships in associations (such as industry associations) and/or national/international advocacy organisations	Member of Business Unity South Africa (BUSA) through the Retailers Association (RA), the Wholesale and Retail SETA (WRSETA) , the National Clothing Retailers Federation (NCRF), the National Business Institute (NBI), the Black Management Forum (BMF), the Namibian Employers Association (NEA), the Direct Marketing Association (DMA), the National Debt Mediation Association (NDMA), the Jewellery Council of South Africa (JCSA), EQUIP, Retailers Uniting Against AIDS, the GreaterGood CSI Manager’s Forum, Retail Tax Forum and the Payment Card Industry Security Forum.
4.14	List of stakeholder groups engaged by the organisation. Examples of stakeholder groups are: communities; civil society; customers; shareholders and providers of capital; suppliers; and employees, other workers, and their trade unions	The section on stakeholder engagement, in the Corporate Governance review, outlines the key stakeholder groups, the main forms of engagement, the key issues and concerns addressed by each group and Foschini’s response to these.
4.15	Basis for identification and selection of stakeholders with whom to engage
4.16	Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group
4.17	Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting
MANAGEMENT APPROACH AND PERFORMANCE INDICATORS
ECONOMIC		including policies, management systems, management approach and performance relating to the following indicators
5. Economic performance
DMA	Disclosure on management approach	A broad outline of the group’s management approach on its economic performance is provided in the Sustainability overview.
EC1	Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments	This is addressed in the Value Added Statement in the Governance section and the Transformation and CSI report.
EC2	Financial implications and other risks and opportunities for the organisation’s activities due to climate change	The group does not consider itself to be significantly exposed to risks associated with climate change; nonetheless, the group recognises the need to ensure its agility in responding to longer-term potential risks. Further information on the potential risks and opportunities of climate change are available in our response to the Carbon Disclosure Project (CDP).
EC3	Coverage of the organisation’s defined benefit plan obligations	Details relating to the employee defined benefit plans are included in the employee benefits note in the annual financial statements.
EC4	Significant financial assistance received from government	The group does not receive any significant financial assistance from government.
Market presence
EC5	Range of ratios of standard entry-level wage compared to local minimum wage at significant locations of operation	Foschini does not provide a comprehensive range of ratios of entry-level wage compared to local minimum wages, as the retail industry is covered by a progressive sectoral determination that sets realistic minimum salaries with annual increases in excess of inflation. In addition to this, we are committed to providing competitive and fair wages in line with our industry sector.
EC6	Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation	Partially addressed in the Group Merchandise Procurement review.
EC7	Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation	The majority of our operations are located in South Africa, where our BBBEE policies and procedures ensure that we employ locally – this includes hiring for senior management positions. The vast majority of employees appointed are South African. Only in rare occasions will non-South Africans be appointed into highly skilled jobs due to scarce skills available (e.g. in IT roles). In the event of employing any non-South Africans we follow a structured process of advertising both internally and externally, as well as in at least one South African newspaper to ensure that we give preference to South African candidates as our first choice.
Indirect economic impacts
EC8	Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement	This parameter is not regarded as material to Foschini due to the nature of the company’s activities.
EC9	Understanding and describing significant indirect economic impacts, including the extent of impacts	See Value Added Statement in the Governance section.
ENVIRONMENTAL		including policies, management systems, management approach and performance relating to the following indicators
DMA	Disclosure on management approach	A broad outline of the group’s management approach on its economic performance is provided in the Sustainability overview.
Material use
EN1	Materials used by weight or volume	Due to the nature of our business, it is not seen to be sufficiently material to record and report at a quantitative level on this issue.
EN2	Percentage of materials used that are recycled input materials	Commentary on some of our initiatives to use recycled material inputs is provided in the review of our environmental performance. Due to the nature of our business, it is not seen to be sufficiently material to record and report at a quantitative level on this issue.
Energy use
EN3	Direct energy consumption by primary energy source	The group estimates that its direct energy consumption, comprising liquid fuel for our vehicle fleet and equipment, was approximately 1 600 000 litres. Accurate data is currently being calculated.
EN4	Indirect energy consumption by primary energy source	The group estimates that its annual electricity consumption was approximately 154 000 MW/hrs (assessed by converting monetary spend using a factor of R0,5752c per kW/h). A project is currently being scoped for the accurate reporting of electricity and other utilities.
EN5	Energy saved due to conservation and efficiency improvements	The group estimates that its lighting initiatives have resulted in a saving of 511 000 kW/hrs during the financial year, and that a further annualised saving of 309 000 kW/hrs is anticipated in the new financial year.
EN6	Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives	General commentary on some of the group’s energy efficiency initiatives is provided in the environmental performance review, under the services section. The group does not currently have full quantitative data on all reductions achieved.
EN7	Initiatives to reduce indirect energy consumption and reductions achieved
Total water use
EN8	Total water withdrawal by source	While the group recognises that water availability and quality is an increasing challenge in the region, it is not a significant user of water. At its head office and distribution facilities approximately 35 000 kilolitres was used this year. Store consumption is currently not monitored, but plans are in place to do so in future.
EN9	Water sources significantly affected by withdrawal of water	Due to the nature of our core business, the group does not see this issue as being sufficiently material for reporting purposes.
EN10	Percentage and total volume of water recycled and reused	The group does not reuse or recycle water. An overview of the group’s approach to managing water is provided in the environmental performance review. Water is primarily consumed for personal and hygiene purposes. Regular maintenance ensures that there is minimal wastage.
Biodiversity
EN11	Location and size of land owned, leased, managed in, or adjacent to, protected areas of high biodiversity value outside protected areas	The group does not occupy any property that could have any significant impact in areas of high biodiversity. A review of the group’s approach to managing the risks associated with its properties (most of which are leased) is provided in the Group Property review.
EN12	Description of significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas
EN13	Habitats protected or restored
EN14	Strategies, current actions and future plans for managing impacts on biodiversity
EN15	Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk
Emissions, effluents and waste
EN16	Total direct and indirect greenhouse gas emissions by weight	An analysis of the group’s carbon footprint during the year in review is currently being completed by external consultants. Details on the group’s carbon footprint for the previous two years are provided in the environmental performance review in the services section. The analysis in 2009 was expanded to include a Scope 3 inventory and provides a benchmark for the measurement and reduction of the group’s carbon emissions in the future.
EN17	Other relevant indirect greenhouse gas emissions by weight
EN18	Initiatives to reduce greenhouse gas emissions and reductions achieved	A brief description of our energy efficiency initiatives is provided in the environmental performance review in the services section.
EN19	Emissions of ozone depleting substances by weight	As detailed in the group’s carbon footprint, 303 kg of HCFC22 (Freon) was used.
EN20	NO, SO and other significant air emissions by type and weight	Foschini’s operations do not involve atmospheric process emissions of this nature.
EN21	Total water discharge by quality and destination	Foschini’s operations do not involve material discharge of water. The group does not see this issue as being sufficiently material to warrant separate quantitative reporting.
EN22	Total weight of waste by type and disposal method	Details on the group’s approach to managing waste and partial data on the group’s solid waste is detailed in the environmental performance review. The group is committed to improving monitoring on this issue.
EN23	Total number and volume of significant spills	Due to the nature of the group’s activities, this is not applicable.
EN24	Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III and VIII, and percentage of transported waste shipped internationally	This is not material to the group’s business. Foschini’s operations do not involve the transportation of waste deemed hazardous.
EN25	Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and run-off	This is not material to the group’s business. Foschini’s operations do not involve material discharge of water and run-off to surrounding habitats.
Products and services
EN26	Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation	Efforts in this regard are currently limited (for example, watch batteries are environmentally disposed of in the workshop). The group plans to focus more on developing appropriate initiatives as part of its longer-term sustainability strategy that is being developed and in line with new legislative requirements.
EN27	Percentage of products sold and their packaging materials that are reclaimed by category	The group does not see this issue as being sufficiently material to its core business.
Compliance
EN28	Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations	No fines were incurred this year for non-compliance with environmental laws.
Transport
EN29	Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce	Merchandise transport is managed by outsourced professionals who ensure that their vehicles perform at optimal efficiency.
Overall
EN30	Total environmental protection expenditures and investments by type	The group does not see this issue as being sufficiently material to its core business to warrant separate quantitative reporting.
SOCIAL		including policies, management systems, management approach and performance relating to the following indicators
Labour practices and decent work
DMA	Disclosure on management approach	A broad outline of the group’s management approach on its human resources performance is provided in the Human Resources review.
LA1	Total workforce by employment type, employment contract and region	This is addressed in the Human Resources review.
LA2	Total number and rate of employee turnover by age group, gender and region	The rate of employee turnover is provided in the Human Resources review.
LA3	Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations	Most of the employee benefit schemes provided to the group’s full-time employees entail longer-term commitments and processes that are only suitable for full-time permanent employees. All permanent staff of the group’s wholly-owned subsidiaries are required to join the Foschini Group Retirement Fund. Employees of RCS receive comparable benefits from the Liberty Life Provident Fund. Membership of the Foschini group in-house, subsidised medical scheme is voluntary except for senior employees. All permanent staff of RCS and its subsidiaries are required to become members of a medical plan of their choice offered by Discovery Health. Further benefits offered to the group’s permanent employees include low-interest loans to assist with tertiary education costs for their children and interest-bearing loans for personal use. Further information on employee benefit schemes are provided in the Human Resources review.
LA4	Percentage of employees covered by collective bargaining agreements	There is no broad collective bargaining agreement within the retail sector. Within Foschini, 8% of our employees are unionised. Union negotiations take place on a decentralised basis within the different countries and legal entities.
LA5	Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements	Foschini ensures full compliance with the requirements of the Basic Conditions of Employment Act and the Labour Relations Act. There is no collective agreement within the group.
LA6	Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programmes	The group’s management of occupational health and safety is overseen throughout the organisation, at all levels. Members of staff work with management on various initiatives associated with the ongoing monitoring and enforcement of health and safety in the workplace. At every site there are employees trained in providing first aid to colleagues in need. Further details on our OHS activities are provided in the Human Resources review.
LA7	Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region	This is addressed in the occupational health and safety section of the Human Resources review.
LA8	Education, training, counselling, prevention and risk-control programmes in place regarding serious diseases	This is addressed in the occupational health and safety section of the Human Resources review.
LA9	Health and safety topics covered in formal agreements with trade unions	Health and safety topics are not specifically covered in formal agreements with trade unions.
LA10	Average hours of training per year per employee by employee category	Foschini reports quantitative data on training interventions, but not specifically on average of hours of training per year per employee by employee category.
LA11	Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings	The group implements numerous talent development and staff training initiatives aimed at ensuring the personal growth and skills development of each of its employees, and consequently their ability to manage their longer-term personal and professional prospects. Retirement planning seminars are provided to those head office staff who are approaching retirement age.
LA12	Percentage of employees receiving regular performance and career development reviews	Performance review conversations occur biannually; in the year under review, 80% of all group employees had performance reviews and career development conversations. Further information is provided in the Human Resources review.
LA13	Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity	A profile of the group’s workplace profile against the 2011 employment equity plan for the group is provided in the Human Resources review. The composition of the group’s transformation committee and other governance bodies is included in the Corporate Governance review.
LA14	Ratio of basic salary of men to women by employee category	There are no significant material differences between male and female salary rates.
Human rights
DMA	Dil osure on management approach	In terms of internal employment practices, a general overview of possible risk areas relating to human rights issues, and the group’s approach to managing these issues, is provided in the Human Resources review. In terms of ensuring responsible management of human rights issues in the supply chain, the Group Merchandise Procurement (GMP) division has implemented a revised auditing system to ensure compliance. Further details are provided in the GMP review.
HR1	Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening	The group does not see this issue as being sufficiently material to its core business.
HR2	Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken	General commentary on the group’s approach to managing suppliers is provided in the Group Merchandise Procurement review.
HR3	Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained	Due to the nature of its business the group does not provide employee training specifically on human rights issues other than in terms of relevant training and awareness programmes relating to non-discrimination and labour issues.
HR4	Total number of incidents of discrimination and actions taken	Issues relating to workplace disputes and referrals to the Commission for Conciliation, Mediation and Arbitration (CCMA) have increased from 143 referrals in 2008 to 172 referrals in 2009. These low levels of referrals can be attributed to fair processes and procedures in the workplace.
HR5	Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights	The group does not believe that the right to exercise freedom of association and collective bargaining is at risk at any of its operations. The group’s operations are based in South Africa, Namibia, Swaziland and Botswana, all of which legally recognise the right to collective bargaining.
HR6	Operations identified as having significant risk for incidents of child labour and measures taken to contribute to the elimination of child labour	This issue is broadly addressed in the general review of the group’s approach to managing human rights issues in the supply chain, provided in the Group Merchandise Procurement review.
HR7	Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour	General commentary on the group’s approach to managing suppliers is provided in the Group Merchandise Procurement review.
HR8	Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations	The group manages all its relations, both internal and external, through its values and code of ethics. This ensures that all the group’s stakeholders are within both the laws of the country and the policies of the organisation.
HR9	Total number of incidents of violations involving rights of indigenous people and actions taken	There have been no recorded incidents of human rights violations or of discrimination.
Society
DMA	Disclosure on management approach to act in society and community	A broad overview of the group’s management approach to addressing its societal impacts is provided in the Sustainability overview.
SO1	Nature, scope and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities, including entering, operating and exiting	The group does not have structured processes in place to assess and manage the impacts of its activities on communities. The group believes that this indicator is more appropriate to higher impact sectors such as mining and resources. A broad review of the economic value added of the group’s activities is provided in the Value Added Statement in the Governance section.
SO2	Percentage and total number of business units analysed for risks related to ethics	The group’s approach to managing risks related to ethics is provided in the Risk report in the Governance section
SO3	Percentage of employees trained in organisation’s anti-corruption policies and procedures	The group’s approach to ensuring against corruption in its activities is outlined in the Risk report in the Governance section.
SO4	Actions taken in response to incidents of corruption	This is addressed in the Risk report in the Governance section. There have been no incidents of corruption.
SO5	Public policy positions and participation in public policy development and lobbying	The group has contributed to various relevant policy development processes. An outline of these is provided in the review of the group’s stakeholder engagement activities, in the Corporate Governance report.
SO7	Total value of financial and in-kind contributions to political parties, politicians and related institutions by country	No donations are made to political parties.
SO6	Total number of legal actions for anti-competitive behaviour, anti-trust and monopoly practices and their outcomes	There were no legal actions for anti-competitive behaviour, anti-trust and monopoly practices and their outcomes.
SO8	Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations	No fines or non-monetary sanctions were incurred for non-compliance with laws and regulations over the past year.
Product responsibility
DMA	Disclosure on management approach	A broad overview of the group’s management approach to product responsibility impacts is provided in the Group Merchandise Procurement review.
PR1	Life cycle stages in which health and safety impacts of products and services are assessed for improvement and percentage of significant products and services categories subject to such procedures	The group does not currently undertake any formal assessments of the health and safety impacts of its products through their life cycle. The group has not had any requests from stakeholders for such assessments and does not believe this to be sufficiently material due to the nature of its core business. The group is not directly involved in the design and development of new products.
PR2	Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes	There were no incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle.
PR3	Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements	In terms of product labelling the group ensures compliance with relevant consumer protection legislation. Significant changes are anticipated in relation to the Consumer Protection Act, as described in the legal compliance review in the Governance section.
PR4	Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes	No such incidents have occurred during the review period.
PR5	Practices related to customer satisfaction, including results of surveys measuring customer satisfaction	The group monitors issues raised by customers via its customer services call centre, its websites and by being linked to external customer service websites. In addition, the group participates in the annual Orange index, which benchmarks service excellence. This has reflected a significant improvement compared to the previous year.
PR6	Programmes for adherence to laws, standards and voluntary codes related to marketing communications, including advertising, promotion and sponsorship	The group is a member of the Direct Marketing Association and is fully compliant with their code of conduct. The group is in the process of ensuring full compliance with the Consumer Protection Act and will be compliant by the effective date. The group is also compliant with the requirements of the National Credit Act.
PR7	Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship by type of outcomes	No incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship by type of outcomes have been noted.
PR8	Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data	No substantiated complaints regarding breaches of customer privacy and losses of customer data have been noted.
PR9	Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services	No fines were incurred for non-compliance with laws and regulations concerning the provision and use of products and services during the period under review.

Sustainability

Transformation
Sustainability Overview
Value Added Statement

ANNUAL REPORT 2010