WESFARMERS SUSTAINABILITY REPORT 2018

Managing our emissions

The scale of the climate challenge is great but the International Panel on Climate Change highlights that the world has the means to address it. Our divisions are looking for ways to improve energy efficiency, reduce emissions across their operations and supply chains and invest in low-emissions and renewable technologies as we transition to a low carbon economy.

We recognise our responsibility to all our stakeholders to play an active role in addressing climate change.

We emit greenhouse gases both directly and indirectly. Our direct (Scope 1) emissions come from our industrial businesses, including the use of natural gas and diesel, and fugitive emissions from coal mining. Our main source of indirect (Scope 2) emissions is electricity used by our operations. We also estimate our Scope 3 emissions, which are other indirect emissions that occur as a result of our operations (e.g., staff air travel), but are not controlled by us.

We are able to manage our emissions intensity (tonnes of emissions per one million dollars revenue) through various initiatives including technology improvements in our industrial processes and through energy-efficiency initiatives in all our businesses.

Our emissions

This year, we emitted a total of 3,945 thousand tonnes of carbon dioxide equivalent (CO2e) in Scope 1 and Scope 2 emissions, which was three per cent lower than last year. This represents a 6 per cent reduction in emissions intensity from last year.

This year, the decrease in our emissions was driven by energy-efficiency projects at Coles, Kmart and Officeworks which accounted for a reduction in more than 200 thousand tonnes of CO2eContinued use of nitrous oxide abatement technology installed in CSBP’s nitric acid plants delivered reduced greenhouse gas emissions. An average 85.5 per cent total nitrous oxide abatement was achieved during the year, which equates to 1,157,738 tonnes of CO2e not being producedThe decrease is also related to the sale of Curragh coal mine as we have calculated the emissions related to our Resources business up until it was divested in March.

This year we have estimated Scope 3 emissions of 767 thousand tonnes CO2e. This includes:

  • 32 thousand tonnes CO2e from air travel;
  • 92 thousand tonnes CO2e in emissions from LPG, petroleum, natural gas and diesel mostly associated with third party transport fleet;
  • 201 thousand tonnes CO2e in emissions that escape from waste that is disposed to landfill; and
  • 442 thousand tonnes CO2e in emissions from electricity.

Click here for more detail on our greenhouse gas emissions reporting.

Greenhouse gas emissions

3,945

tonnes CO2e: '000
2018   3,945
2017   4,078
2016   3,915
2015   4,012
2014   4,047

Our energy use

During the year electricity price risk exposure for our retail businesses has received some attention. Over the past three years, prices in the National Electricity Market (NEM) on the east coast of Australia have surged. 

To manage the risk associated with fluctuating energy costs some of our Divisions work together to purchase electricity. This function enables the Divisions to actively manage electricity price exposure rather than locking in a fixed price that is struck at the commencement of a contract for the duration of the contract. 

To optimise electricity consumption, Coles, Kmart and Target use an electricity servicing centre. Through the use of smart meters monitoring store electricity usage against a base load profile, the energy centre is able to report back to store maintenance technicians to rectify any anomalies.

Increasingly, Building Energy Management Systems (BEMS) are rectifying anomalies in near real time in all our retail businesses.

Some of our retail Divisions include solar systems into new stores as standard and on existing stores where feasible and with landlord agreement. Bunnings has installed solar photovoltaic (PV) systems at 23 stores across Australia, covering 25,000 square metres of roof area. Officeworks opened its first store with solar panels during the year. The North Lakes store was an Officeworks development that enabled the installation of a 100-kilowatt solar system on the roof to utilise the intense Queensland sunlight.

WIS has undergone a process of replacing inefficient fluorescent tubes and metal halide high bay lights with LED lighting as well as installing solar PV arrays across its branches and distribution centres. These programs have saved more than 2,000,000 kilo-watt hours and over 2,000 tonnes of CO2e since 2015. This is equivalent to the annual energy use of approximately 300 average Australian homes.

Our divisions all replace lighting with light-emitting diode (LED) lights where feasible. Coles began its LED replacement program in 2012 and plans to complete it in FY19, when every light in every supermarket will be LED. Kmart and Target replaced nearly 117,000 inefficient fluorescent tubes with LEDs at 72 stores during the year. Officeworks retrofitted 33 existing stores with LED lighting and in total 146 stores now have energy efficient lighting across the selling floor. 

Our total energy use reduced by 10 per cent compared to last year with an energy intensity for all energy consumed for 415 gigajoules per million dollars of revenue, 13 per cent lower than last year.

Targets

With its business model centred around divisional autonomy, Wesfarmers does not set a Group-wide greenhouse gas emission target. 

All our businesses run autonomously and set targets appropriate to their operations.

Division Targets and business priorities Progress
Bunnings Bunnings is accelerating energy reduction through more renewable energy installations and lighting efficiencies, and will roll out 25 solar PV systems and 19 LED retrofits in the 2019 financial year. During 2018, nine stores had solar PV systems installed, taking the total number of solar PV systems to 23 stores, covering 25,000 square metres of roof area. Bunnings also retrofitted LED lighting into 12 existing stores during the same period, with 26 stores retrofitted to date.
Coles In 2009, Coles set a target to reduce its greenhouse gas emissions by 30 per cent by 2020. Coles met this target four years early in 2016. Since 2009, Coles has achieved a 35 per cent reduction in greenhouse gas emissions, including a 74 per cent reduction in scope one greenhouse gas emissions from refrigerant sources due to ongoing refrigeration and HVAC upgrades.
Department Stores Kmart has set an energy efficiency target of 20 per cent reduction of energy per square metre by December 2020 compared to 2015. Target has set an energy efficiency target of 25 per cent reduction of energy per square metre by December 2019 compared to 2015. An overarching strategy of lowest cost abatement first, combined with improved data collation, analytics, systems and processes, specifically around energy demand management, has enabled our Department Stores to drive energy efficiency projects. Kmart stores have reduced their electricity usage by 15 per cent since 2015 equating to 20 per cent less greenhouse gas emissions per metre of store building area. Target stores have reduced their electricity usage by 32 per cent since 2015 equating to 36 per cent less greenhouse gas emissions per metre of store building area.
Officeworks Officeworks has set a target of a 15 per cent reduction in greenhouse gas emissions from electricity usage compared to 2015. Officeworks has reduced electricity usage by 11 per cent since 2015 equating to 17 per cent less greenhouse gas emissions.
Industrials Most abatement projects have already been realised for the WesCEF business. The focus is on ongoing improvements through a process of continuous review and action. Industrial and Safety has an internal target of a 10 per cent reduction in electricity used year on year. As part of ongoing environmental licence compliance requirements all facilities must comply with stringent emissions, water quality, water efficiency and air quality requirements. Under the Safeguard Mechanism all facilities are below baseline and forecast to remain below, based on legislation as it is currently enacted. Significant abatement projects have already been completed. A business-wide focus on energy, water and waste efficiency ensures that opportunities are constantly reviewed as part of ongoing process improvements at all facilities. During 2018, Kleenheat entered into a ten-year 30MW PPA to source renewable energy for its customers. Since 2015, Industrial and Safety (excluding Coregas Air Separation Unit in Mackay) has achieved a 25 per cent reduction in electricity through solar installations and LED retrofit projects.