A healthy environment is a fundamental right and expectation of all communities. With operations that include retail outlets, coalmines, chemical, energy and fertiliser manufacturing, and insurance, Wesfarmers’ activities are complex and widespread. We have a responsibility to all of our stakeholders to manage our operations in such a way that it reduces our environmental footprint.
Looking for innovative solutions with good commercial and environmental outcomes is critical to the sustainable success of our businesses. Taking a long-term approach to managing our businesses is not only good for the environment, but it contributes to the resilience and sustainability of our businesses as well.
With the diversity of our Group, each of our businesses face different challenges in their management of the environment, which in turn means our responses vary widely.
This year for the first time, we are reporting both absolute and relative metrics for our greenhouse gas emissions, water use and energy use. Using relative measures provides a more accurate comparative measure across a number of years, despite potential changes in business operations, for both our company and in comparison to other similar organisations.
During the year, Wesfarmers sold two subsidiaries: Wesfarmers Premier Coal Limited (Premier Coal) in December 2011; and Energy Generation Pty Ltd (enGen) in August 2011. Data covering the ownership period is included in the Data Bank. However, it is not included throughout the rest of the report.
Wesfarmers is committed to reducing our relative and absolute greenhouse gas emissions, and all of our business units have initiatives and programs in place to minimise and reduce these emissions.
By measuring reported emissions per million dollars of revenue at the Group level (see figure 5) it is possible to track the changes in our emission intensity over time against the indicator of business performance. Over the past 10 years there have been significant changes in the Group’s business activities, including the acquisition of the Coles Group (in 2007), significant increases in production at our industrial businesses and extensive growth in our retail businesses. These relative metrics are also reported in each business unit section of this report.
In our NGER Act report for 2011/12, Wesfarmers recorded 4,666,196 tonnes carbon dioxide equivalent (CO2e) (Scope 1 and 2 emissions). This is a decrease of 7.49 per cent compared to the 5,044,231 tonnes CO2e reported in the 2010/11 NGER Act report.
This decrease in reported emissions under the NGER Act occurred primarily in WesCEF and Coles (through a mixture of emissions abatement and energy efficiency initiatives) as well as the sale of Premier Coal and enGen.
Figure 6 displays our decrease in NGER Act reported emissions in the four years of reporting under these laws.
In our 2011 NGER Act report, enGen and Premier Coal reported a combined total of 160,836 tonnes CO2e, including 138,231 tonnes CO2e (Scope 1) and 22,605 tonnes (Scope 2). The combined contribution of the businesses we sold during the year, in the period they were owned by Wesfarmers in 2011/12, was approximately 75,666 tonnes CO2e. This includes 64,736 tonnes CO2e (Scope 1) and 10,930 tonnes CO2e (Scope 2). These emissions are reported in the footnotes to the Group data in the Data Bank.
We are also an investor in two joint ventures and a company in Australia which report under the NGER Act: the Bengalla mine in the Hunter Valley, New South Wales (40 per cent-owned by Wesfarmers and operated by Coal and Allied); Queensland Nitrates Pty Ltd at Moura in Queensland (50 per cent‑owned by Wesfarmers and operated as a separate management entity); and the 50 per cent-owned Wespine sawmill in Western Australia.
Our equity share of the 2011/12 emissions reported under the NGER Act by these three businesses is 347,018 tonnes CO2e. The 2011/12 NGER Act reports by these businesses and Wesfarmers will be published in February 2013.
In addition, each year we estimate the greenhouse emissions created from transport operations in our supply chains (calculated as the emissions created in transport from the final supplier to our distribution centre, factory or mine site). In 2011/12, this estimate is 650,925 tonnes CO2e compared to 760,000 tonnes CO2e in 2011. The decrease is primarily related to more accurate measurement of shipping emissions from our maritime transport suppliers.
Our total direct and indirect (Scope 1, 2 and 3) greenhouse emissions for the Group in 2011/12 were 5,820,625 tonnes CO2e. This figure excludes our equity share of joint venture and transport emissions in our supply chain as we have no direct operational control over these activities.
This was 528,951 tonnes CO2e below emissions reported last year on the same basis, largely due to a significant investment across the Group in energy efficiency initiatives, particularly in Coles; emission abatement activity in the chemicals business in WesCEF; and the increasing impact of the mandated Renewable Energy Target on the greenhouse intensity of Australia’s publicly available electricity generation systems.
Further details on several of these initiatives can be found in the relevant business unit sections of this report.
As part of our efforts to reduce emissions, we continue to contribute to a major emissions reduction initiative, the COAL21 fund, which levies coal producers to fund research into low emission coal technologies. To date we have contributed $5.5 million to the COAL21 fund and our total contribution is likely to reach $30 million over 10 years.
From 1 July 2012 a carbon pricing scheme began operating in Australia (under the Clean Energy Act 2011) alongside the similar emissions trading scheme operating in New Zealand.
Wesfarmers is well-prepared for the implementation of these laws, having largely completed a set of complex tasks. This involves emission monitoring and analysis changes in the businesses, review and development of our reporting procedures and policies, and development of carbon accounting policies. It also includes additional auditing and assurance for the Jobs and Competitiveness Program (a program to provide support for trade-exposed and energy intensive businesses) established by the legislation. In preparing for the carbon pricing scheme we are also reviewing the impact on our supply chain and training employees at many levels about the requirements of the Australian Competition and Consumer Commission in respect to potential product price changes related to the new legislation.
This work ensures we can understand and address the compliance requirements of the legislation while ensuring our customers and suppliers are treated fairly.
The carbon pricing legislation in New Zealand continued, although the government has announced its intention to legislate to defer the full carbon price implementation until 2015. Our New Zealand-based greenhouse emissions were 10,332 tonnes CO2e Scope 1 and 2.
NGER Act reports can be found online at www.cleanenergyregulator.gov.au
Further information on our greenhouse emissions can be found in the Data Bank.
Energy use and its relationship to carbon emissions and business costs are a significant consideration for the Group. For a number of reasons, energy prices are rising quickly in many jurisdictions, and the combination of carbon constraints and price rises places additional focus on energy efficiency initiatives.
In addition to our internal focus on energy efficiency, Wesfarmers is registered under the federal government’s Energy Efficiency Opportunities Act 2006 (EEO Act), which incorporates assessment of at least 88 per cent of all Wesfarmers’ energy use. We submitted our fourth public and government reports under the EEO legislation in December 2011, and the public report is available on our website.
The total energy use for the Group in 2011/12 was 30.00 petajoules, a decrease of approximately 11.1 per cent on last year following the sale of Premier Coal and enGen.
Of this total energy, approximately 18.79 petajoules related to process inputs (mainly natural gas) and liquid fuels used in our industrial and mining operations, which was a decrease of 15.6 per cent on last year. Energy use in the remaining businesses was 11.21 petajoules, a decrease of 2.5 per cent.
This is different to the energy use that will be reported in the Wesfarmers NGER Act report for 2012, due to legal and definitional issues required by the NGER Act. Specifically, it relates to natural gas passed through our Kleenheat production facility at Kwinana, Western Australia, which is not actually converted to product or combusted, but which has to be counted in the NGER Act report (7.54 petajoules).
The NGER Act does not require us to report for Premier Coal and enGen (sold during the year), but their combined energy use was 0.98 petajoules during the ownership period.
The Wesfarmers Energy Efficiency Opportunities report is available on our website under the ‘Community & Sustainability’ tab at www.wesfarmers.com.au
The Wesfarmers NGER Act report will be published on www.cleanenergyregulator.gov.au in February 2013.
Further information on our energy use can be found in the Data Bank.
Across the Group, our estimated scheme, surface and groundwater use was 13,151 megalitres.
Last year’s estimated total Group consumption was 12,107 megalitres. This increase is largely due to higher production in chemicals manufacturing at Wescef (where water is a significant process input for cooling purposes) and growth in our Coles business, including more effective water metering to improve data quality.
Our total water use included 1,584 megalitres of groundwater (largely at our mine sites and industrial operations); 2,166 megalitres of treated water from recycled sewage waters at Wescef’s chemical manufacturing operations at Kwinana, Western Australia and Coregas at Port Kembla, New South Wales, and 2,720 megalitres of surface water harvested at our Curragh mine.
Recycled and re-used water now represents 16.5 per cent of our total water use.
We are continuing to improve the accuracy of this data in the areas where we estimate water use, particularly for retailers other than Bunnings, where shared facilities are common. Coles in particular is installing a significant number of additional water meters in its stores to better measure and manage water use, which has been the most significant factor in our reported water use increase this year.
Further information on our water consumption can be found in the Data Bank.
All of our retail businesses are signatories to the Australian Packaging Covenant (APC) through the registration of Wesfarmers Limited. The APC is a voluntary packaging waste reduction and recycling initiative underpinned by the National Environment Protection (Used Packaging Materials) Measure 2011. All of our retail businesses reported on their activities (against our agreed Action Plan for 2010-2014) in March 2012.
During the year, our businesses recovered 248,170 tonnes of packaging or organics for eventual recycling (an increase of 16.7 per cent on the previous year) and disposed of 158,325 tonnes of waste to landfill. This is a 7.6 per cent increase on waste disposal compared to last year.
Some significant achievements included: progress in reducing the packaging used to transport and store a range of products in Kmart and Target; an APC-funded program with Coles in Victoria encouraging the recovery of soft plastic bags for recycling into outdoor furniture; and the enhancement of the significant recycling of packaging resources in our retail operations. Further detail is contained in various business sections of this report.
During the year, the Product Stewardship (Televisions and Computers) Regulations 2011 came into force. These regulations require entities that manufacture or import television and computer equipment in Australia to enter a contractual arrangement with parties approved by the regulator to fund the recovery and recycling of obsolete and discarded equipment.
Under the regulations, the target in 2012/13 is to recycle 30 per cent by weight of the television and computer equipment imported or manufactured in the previous year, rising to 80 per cent by 2021.
Of our businesses, Officeworks, Coles, Kmart and Target are involved, and Wesfarmers has entered into a Product Stewardship Agreement with DHL Supply Chain (Australia) Pty Ltd to achieve these objectives. Over time, the capacity for Officeworks stores to receive used computing equipment for recycling will be extended across Australia.
Liquid waste data is difficult to collect for most of our facilities because it is represented by unmetered discharges to public sewerage systems and in some cases liquid wastes delivered to appropriate treatment plants. Our Curragh coalmine also discharges ground and rainwater from its mine voids under licence with the relevant authorities. CSBP (a WesCEF business) at Kwinana, Western Australia, has a licence (under the Environmental Protection Act 1986) to discharge waste water into a treated public waste water system that eventually discharges to the Indian Ocean. Most of this effluent passes through CSBP’s nutrient-stripping wetland before discharge.
Our agreed APC Action Plan is available at www.packagingcovenant.org.au
Any non-compliances with environmental regulations or any prosecutions relating to environmental issues during the year are disclosed in the various business reports.
Wesfarmers Resources and WesCEF are required to report under the National Pollutant Inventory (NPI). Full details are available on the NPI website, with 2011/12 data expected to be available in February 2013.
Total environmental expenditure, including land remediation costs for 2011/12, is $90.58 million.
This compares with last year’s total of $34.96 million. The difference is largely due to our continuing focus on voluntary energy efficiency investments, and a general expansion of related work across the Group. These costs include salaries and overheads, specific environmental projects and any other costs (such as fees paid to consultants and capital expenses) for an environment-related purpose, which can include emission reduction, effluent management, revegetation and energy efficiency.
Remediation of site contamination is an issue for some of our businesses. Wesfarmers Limited is responsible for the remediation of several sites that were leased or owned by businesses sold many years ago and financial provision has been made to cover the estimated cost of these activities.
The WesCEF business CSBP is engaged in the remediation of a former fertiliser site at Bayswater in Western Australia, which has been reported on previously. Active remediation has concluded at the site and activity now relates to monitoring and the statutory audit processes prior to site redevelopment.
During the year, Wesfarmers made some significant progress at a site in Manjimup, Western Australia that was formerly owned by Sotico (a subsidiary of Wesfarmers). At the time of report preparation we are planning the final review and investigation activities required to allow us to seek reclassification of the site under the provisions of the Contaminated Sites Act 2003. Remediation outcomes at a site in Kewdale, Western Australia, have progressed to the stage where Wesfarmers will seek a similar regulatory outcome for that site by the end of 2012.
Monitoring and risk assessment continued at former locations owned or managed by Wesfarmers Transport in Kewdale, Carnarvon and Port Hedland in Western Australia.
The Resources and WesCEF reports under the NPI are available at www.npi.gov.au