With operations that are far-reaching and complex, keeping focused on our economic, environmental and social performance is critical to delivering on our objective of providing value to all our stakeholders.

I'm very pleased to welcome you to the 2011 Wesfarmers Sustainability Report.

As I reflect on the past year and the challenges and opportunities in our businesses, it reminds me once again about the true value of sustainability. With operations that are far-reaching and complex, keeping focused on our economic, environmental and social performance is critical to delivering on our objective of providing value to all our stakeholders.

Importantly, sustainability within the Wesfarmers Group isn't simply an 'add-on'. Stakeholder expectations have evolved well beyond purely the financial success of an organisation, but Wesfarmers has long recognised the value and opportunity of a holistic approach to managing our operations. For us, sustainability isn't just a public relations exercise while the 'real' business goes on regardless. As you will see in this report – and indeed in all earlier such reports – the detail of investing in and improving our operations all contributes to the sustainability of our business as a whole.

This is the fourteenth year we have published such a report and our businesses are all doing some terrific things to initiate positive change within their operations. But there is progress to be made in many areas as well, and we remain committed to reporting our sustainability outcomes in a frank and transparent way. As a Group, we are developing a sustainability policy which will formalise what has been our long-held view about running our businesses. The policy encapsulates five key principles around which we prioritise our sustainability efforts: people; carbon and energy; community partnerships; environmental footprint; and economic development. You will see that each of our businesses report specifically on these areas, and we collate this data for reporting at a Group-wide level.

Fundamental to our success – and therefore our value – are the people within our business. As Australia's largest private sector employer, we invest millions of dollars not only in wages, but training and development too. However, it is the safety of our people which is – and must be – our most important focus. Tragically, in August last year a contract worker at one of our mines was fatally injured in a single vehicle accident. In the most awful of circumstances we are reminded about the importance of safety. As an organisation, providing a safe work environment is both our responsibility and our obligation – everybody has the right to return home safely each day. While all of our businesses prioritise and focus on safety, we can and must do better.

Climate change remains at the forefront of public debate and in July this year the Federal Government announced its Clean Energy Legislative Package. We have continued to work cooperatively and collaboratively with government and have contributed where relevant to the debate. Indeed, Wesfarmers has long held the view that climate change is one of the most significant issues facing not only our business, but our community as well. While I think it is important to contribute to the broader policy debate on the issue, we must also continue to focus on what our businesses can do to minimise their carbon footprint. All of our businesses are taking steps to reduce carbon dioxide emissions and improve energy efficiency. Coles, in particular, has made significant inroads into improving the energy efficiency of its stores, and our industrial businesses are looking for opportunities to reduce their emissions with direct abatements where feasible. Climate change certainly presents challenges for our business but we must also look to embrace the opportunities to innovate for improvement.

One of the areas I feel passionately about for our business is our relationship and involvement with Aboriginal and Torres Strait Islanders. In November 2009, we launched our first Reconciliation Action Plan, and pleasingly, we continue to take small but significant steps towards reaching our goals. Each of our businesses has developed an Aboriginal strategy focusing on providing employment initiatives, along with raising cultural awareness in respect to Aboriginal people. In November 2010, we launched the Wesfarmers Arts National Indigenous Fellowships at the National Gallery of Australia. This annual program sees 12 young and emerging indigenous curators from across Australia awarded scholarships to work intensively with the curators and collections at the National Gallery, in a long-term professional development and museum industry mentoring program. This initiative is the first of its kind in Australia. We continued to participate in the Jawun Indigenous Corporate Partnerships program, with a number of employees involved in the secondment program from across the Group. We have also broadened our community partnerships program and now have a number of significant partnerships with Aboriginal organisations across Australia.

Notwithstanding all of the above, however, two other events unfolded over the past year which helps to put our business operations in perspective. In early 2011, devastating floods affected hundreds of thousands of people, principally in Queensland but also in Victoria. Tragically, lives were lost and, like many other Australians, our deepest sympathy went out to family and friends, as well as those who lost homes and businesses.

At the time, in recognition of the scale of the disaster, Wesfarmers donated $5 million to the Queensland Premier's Disaster Relief Appeal. We have a strong involvement with the people of Queensland – employing nearly 40,000 people there – many of whom were affected either directly or indirectly by this disaster.

New Zealand also experienced disaster on a huge scale, with earthquakes in Christchurch devastating that city. Once again, watching from afar we felt for the people of Christchurch especially, and made a NZ$1 million contribution to provide assistance to the many people affected. In both these events, the actions of our team members in providing assistance to those in need were remarkable. Both were devastating events, but the aftermath demonstrated the resilience and generosity of the Australian and New Zealand people.

Once again, I'd like to extend my thanks to all our employees for their efforts over the past year, many of which have been captured in some way in this report. As always, we'd love to hear from any of our stakeholders, and we have included a form on the inside back cover for this purpose.

Richard Goyder Managing Director