We regularly and openly listen to our stakeholders to understand their expectations and how these might change. We welcome your feedback on our sustainability performance or reporting. Please click here to provide feedback.
At a Group level, Wesfarmers considers the interests of a wide cross-section of stakeholders in a variety of ways, determined by the actual or potential impact of our business on their interests. See below for more detail on how we communicate with particular stakeholder groups.
Every year, as part of our report preparation process, we conduct a stakeholder engagement survey to continually improve our communication on sustainability-related issues. Respondents identified the following issues as areas of interest, which are addressed in this report:
As at June 2016, we employed around 220,000 people. We have a number of channels which we use to listen to our employees, including periodic divisional employee surveys, discussions with unions, personal contact, our whistle-blower process, our website and via email.
This year, as in previous years, the key messages we have received from employees include discussions around professional development, concerns relating to individual circumstances and concerns regarding business restructures. Divisions act on the feedback they receive in employee surveys and individual concerns are investigated and addressed. Our whistle-blower process is reported to our Audit and Risk Committee annually.
Our customers contact us through emails, letters, websites, telephone calls and in person throughout the year. Customers who are concerned or pleased about particular activities in our business decisions sporadically communicate their views directly to Wesfarmers. Customer feedback received directly via email is monitored every working day and passed on as soon as possible, usually immediately, to the area of the Group which is best positioned to respond.
We listen to our shareholders throughout the year. We engage with our retail shareholders at our annual general meeting. We listen to our institutional investors at results announcements, strategy and operational briefings, post-result road shows and other ad hoc meetings.
We hold a number of investor briefings each year relating to Wesfarmers’ half- and full-year results and Wesfarmers’ first and third quarter retail sales results. These are open to all shareholders to listen to live or delayed via public webcasts and for investment analysts to ask questions. Analysts can ask questions of the Managing Director and Finance Director and, in the case of the half- and full-year results releases, divisional Managing Directors.
In addition, the Managing Director and Finance Director hold briefings, both domestically and offshore, with representatives from a number of major Wesfarmers investors and broking groups in the weeks following the half- and full-year results announcements. Feedback from these briefings, including the areas of most interest to investors and shareholders, are used to guide future market communications.
The main issues that shareholders raised this year related to balance sheet, competitiveness of the industries in which we operate, dividend policy, portfolio management and the Group’s outlook.
Our investors are also interested in understanding our approach to ethical sourcing, supplier relationships, climate change resilience and broader corporate governance, which are among the topics discussed in investor briefings and our annual general meeting.
Wesfarmers is committed to long-term outcomes that benefit both shareholders and our suppliers while recognising that robust negotiations are a part of normal and acceptable business practice and contribute to innovation, efficiency and the long-term sustainability and competitiveness of all parties.
Our divisions have close working relationships with their suppliers. They also have ethical sourcing audit and review systems for higher-risk suppliers. Our businesses are members of supplier bodies, recognise suppliers through awards and meet with suppliers regularly and as requested.
For details of the main issues raised by suppliers directly this year, see the supplier page of this report.
During the year we liaised with federal and state governments through one-to-one meetings, other direct and indirect communications and participation in formal consultation processes in relation to a range of issues that affect our businesses and society. Key public policy issues that Wesfarmers liaised with the Federal Government on include:
The Effects Test
Flowing from the Federal Government’s Harper Review of Competition Policy, a recommendation was made to introduce an ‘effects test’ into section 46 of the Australian Competition and Consumer Act which addresses misuse of market power. It would require a business to take into account the effect of its conduct on market competition. Wesfarmers, the Business Council of Australia, and most major Australian businesses argued strongly that such a requirement was unnecessary, would add complexity and uncertainty and would, in fact, be anti- not pro- competitive. Nevertheless, in March 2016 the Prime Minister announced the initiative would be legislated.
Wesfarmers supported the Harper Review’s other recommendations to remove the remaining restrictions on trading hours, to consider competition policy in planning and zoning rules and to repeal price signalling provisions.
Retail trading hours
Wesfarmers, Bunnings and Coles continued discussions with the Western Australian government on the issue of retail trading hours. Some reforms were made to the State’s restrictive trading hours regime during the year.
Wesfarmers joined the Business Council of Australia in arguing for a reduction of the Australian corporate tax rate.
Tariff on imported PVC
Wesfarmers-owned Australian Vinyls, the last domestic manufacturer of PVC resin, ceased production during the year and moved to an import model for business continuation. Discussions continue with the Federal Government over ending the remaining tariff restrictions on imported PVC now that there are no domestic producers to protect.
The Emissions Reduction Fund
Wesfarmers was encouraged by the Federal Government to make an application to the Emissions Reduction Fund so that we could implement additional energy efficiency initiatives across our retail businesses. Wesfarmers businesses use LED lighting in new store development, but this successful bid makes it economically viable to retrofit more than 200,000 new high-efficiency light fittings in existing stores and distribution centres over a seven year period. The impact of this initiative will be the abatement of an additional 15,000 tonnes of CO2e per year.
GST on imported goods
Wesfarmers continued to put the position to the Federal Government that the taxation provision allowing GST exemption on imported goods to the value of less than $1,000 created an uneven playing field which penalised Australian retailers. In August 2015, the Federal Government announced an end to the exemption, effective July 2017.
In September 2015, Wesfarmers became a signatory to the Business Coalition on Climate Change supporting the Australian government in its bid to secure an effective outcome from the Paris climate change negotiations in December 2015. Wesfarmers supports Australia’s commitments under the Paris Agreement to work towards a global agreement to limit global warming to 1.5°C - 2°C above pre-industrial levels.
Our divisions work collaboratively with non-government organisations (NGOs) on a range of projects. NGOs engage with us on issues such as human and labour rights and environment and public policy.
We continue to build relationships with accredited and reputable NGOs, such as Oxfam Australia, WWF Australia and Care Australia, to identify further opportunities to work together.
We work with a range of industry associations appropriate for our operations including the Australian Packaging Covenant, the Business Council of Australia, the Carbon Market Institute, the Plastics and Chemicals Industries Association, the National Retail Association, Australian Coal Association, the Queensland Resources Council, the Green Building Council of Australia, Retailer Supplier Roundtable and the Roundtable on Sustainable Palm Oil.
Media is an important avenue for communication with our stakeholders. We work with international, national and local media organisations because we believe it contributes to the transparency and reputation of Wesfarmers. Media commentary and inquiries indicate we are expected to uphold high standards of transparency, integrity, corporate governance and financial and operational performance. The media also expects us to contribute to discussion and debate relating to the economy, business confidence and public policy, predominantly in Australia.
Our engagement with media includes holding media conferences to coincide with financial results announcements each quarter and other major events as appropriate. Our corporate affairs department considers all media inquiries and responds appropriately, guided by what is in the best interests of our shareholders. The Managing Director and Chairman are also available for other media interviews on request.
The main issues raised by media this year relate to portfolio management and the Group’s financial performance and growth outlook, including the acquisition of United Kingdom home improvement retailer, Homebase. There was also interest in the organisational restructure including the creation of new divisions for the department store businesses and the resources and industrial businesses, and related senior management changes.
There was also significant media interest in Wesfarmers’ investigation into, and response to, a number of supplier rebate arrangements negotiated in December 2015 at Target which did not meet the Group’s accounting policies and operating standards. More information on this issue is available in the Governance section.
Other key topics and concerns raised by media in the reporting period included incidents of redundancies, impact of low prices on supplier viability, Wesfarmers’ view on public policy debate areas such as the economy, tax and regulation, and the future of coal mining.
As a large, national organisation, we recognise the ongoing importance of community engagement at a local level, and invest in areas we believe contribute to meaningful change in society.
Each of our businesses run their own community partnership program to ensure it best reflects the needs of its business and its local communities. Our businesses all have long-term partnerships with community organisations, as well as engaging at a local level with many community groups seeking sponsorship or support.
In 2016, the Wesfarmers Group collectively contributed more than $57.8 million in direct funding to community organisations across Australia and New Zealand and other regions where we operate. The Group also facilitated donations from customers and employees totalling $53.8 million this year.
As well as requests for sponsorship or other support from the general community, we receive feedback via letters, email and our website.
We endeavour to respond individually to all inquiries, concerns and feedback. Where, due to scope and scale, we cannot respond to each item of feedback received we explain our position. We respond to all requests for sponsorship and donations, guided by our sponsorship policies and priorities.
GRI Reference: G4-DMA (Anti competitive behavior), G4-16, G4-24, G4-25, G4-26, G4-27