Pick n Pay

Sustainable Living Report 2013

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Auditing and traceability Promoting supplier resilience requires increased levels of auditing and traceability. Amongst food retailers an important driver has been growing consumer concern over the origin and contents of food. The challenge is to increase transparency without impacting on the cost of food and other consumer goods. For information on our food health and safety audits, see page 12. All supplier auditing is managed and carried out by our Technical Division. Traceability of food is controlled through food health and safety audits. We have begun to trace ingredients with high environmental and social impacts, such as palm oil and soya, to facilitate sustainable sourcing. CASE STUDY Palm oil Sustainable farming Pick n Pay farmers, from small-scale to large commercial producers, must be economically viable and protect the natural systems that make farming possible. Sustainable farming is fundamental to our ability to provide good, affordable food to our customers, and is only possible if all players – including retailers, farmers, government, workers' organisations and farm communities – work together to create a sustainable and secure food system. Our challenges global systems resource scarcity, skills shortages social unrest and social licence to operate regulatory, investor, consumer, employee and competitor pressure Extreme weather, water availability, soil quality, and waste management present serious challenges for SA farmers, but also drive opportunities for resource and cost efficiency, as well as innovative new products and processes. PNP SUSTAINABLE LIVING REPORT 2013 Larger commercial farmers can introduce risk-management practices for environmental and labour-related risks. For smaller farmers, however, the costs involved can be prohibitive, resulting in the implementation of far fewer robust environmental risk-management and sustainable farming initiatives. The focus areas of our sustainable farming interventions rotational crops labour requirements capital expenditure requirements the role of government policies Sustainable farming practices involve a number of significant challenges and trade-offs. With this in mind, our teams seek to ensure that sustainable farming investments do not drive up the costs of food production or make farmers unable to compete. Our organic range (see page 13) and Green range (page 14) illustrate these challenges. We have initiated a project to identify all PnP-brand products that contain palm oil as an ingredient. There is growing awareness about the need to ensure the palm oil we use is sustainably sourced. Palm oil is widely used in packaged food products sold in supermarkets. The cultivation of palm oil can have serious social impacts and environmental consequences, often involving the destruction of tropical rainforests. This in turn has an impact on biodiversity in affected areas in Africa, Asia and South America. During the next phase of this project, the palm oil used in products we sell will be quantified and traced to its source. This phase will be completed by September 2014, and the results of the process will enable us to define a strategy to set targets for the use of sustainably sourced palm oil. Our Technical Division also checks that: animal welfare standards are met suppliers of organic produce are correctly certified suppliers are compliant with all relevant labour legislation, covering issues such as wages and unlawful (forced or underage) employment There is growing awareness about the need to ensure that the palm oil we use is sustainably sourced 18

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