Our Sustainability Performance
Each year Kmart measures and reports our progress on our most material sustainability issues as part of the Wesfarmers’ Sustainability Report and in accordance with the Global Reporting Initiative Guidelines. In FY14, we focused on seven key areas.
Ensuring the quality and safety of our products
We work to continuously improve the quality and safety of our products and comply with all mandatory standards and reporting requirements in Australia and New Zealand.
As an example of how we approach product safety, this year we recalled 108,000 children's skate helmets after independent testing by three laboratories reported inconsistent safety results. We launched the investigation after a customer returned a damaged helmet. Although no injuries had been reported, our testing found that the straps may fail during an accident. As a result, we decided to recall all helmets as a precautionary measure.
Our approach to quality and safety is underpinned by a comprehensive quality and compliance framework, which outlines the requirements expected of our suppliers, manufacturers, buyers, agents, and quality teams.
Sourcing our products ethically
In the 2014 financial year we implemented a number of measures aimed at enhancing working conditions and safety in supplier factories, including a strengthened Ethical Sourcing Code. Click here for more information on how we work with suppliers and listen to stakeholders.
We conducted 1,120 audits of our suppliers' factories in the past year. The most common issues identified during audits included excessive overtime and incomplete or inadequate records.
A corrective action plan is provided to all factories that fail to meet our Ethical Sourcing Code and follow-up audits are scheduled to ensure compliance.
Although the majority of factories were approved or conditionally approved, our audit program identified 22 critical breaches of our Code in the past year – the most common breach related to attempted bribery. The majority of these suppliers have now been deregistered, meaning no further orders can be placed.
We also commenced a review of our raw materials sourcing to strengthen our approach in line with international best practice.
For more information on Kmart’s ethical sourcing approach, please see our website.
Creating a high performance culture
This year we refreshed our values and culture through our culture program known as Unwritten Ground Rules (UGRs). UGRs guide our behaviours at work, provide us with a shared understanding and common language and ensure we are living Kmart’s values every day.
Through consultation with team members we developed a set of guiding behaviours aligned to our values of deliver results, integrity, customers come first, teamwork and boldness.
To bring our UGRs to life each area of the business engages with team members regularly to share initiatives and reward and recognise high performance. The UGRs also form part of team member goals and performance reviews and individuals who demonstrate outstanding UGRs are recognised at the annual Kmart Awards.
In addition to our UGRs, we have a range of policies and programs to ensure our team is engaged and high performing, including performance reviews, store manager conferences, business updates and a range of learning and development initiatives.
Enhancing the health and safety of our team
We are committed to the health and safety of all team members through the provision of a safe working environment, safe methods of work, and the provision of training to ensure team members have the skills and capability to perform their tasks safely.
The business recorded a significant reduction in its total recordable injury frequency rate from 37.6 last year, to 31.6 this year (a 16 per cent decrease), as well as a reduction in the lost time injury frequency rate from 9.1 last year, to 7.0 this year (a 23 per cent decrease). A key reason for the improvement was the increased focus on team member behaviours driven through a continued focus on manual handling and moving safely techniques and a new business safety coaching program. Click here to learn more about how we protect team members during store refits.
This year Kmart launched a partnership with Red Dust Role Models as part of our ongoing commitment to support Indigenous communities and increase awareness about Indigenous culture within the business. Red Dust Role Models works in collaboration with remote Indigenous communities in the Northern Territory to deliver innovative health promotion programs that encourage Indigenous youth to live a healthy lifestyle.
During the year, we also supported the launch of Half the Sky Australia. Half the Sky enhances the lives and prospects of orphaned children in China through development projects undertaken in co-operation with local partners.
Our total direct community contributions decreased from $1.3 to $0.9 million this year, largely due to the completion of a long-term community partnership between Kmart Tyre and Auto and Road Safety Education.
Total indirect community contributions, including coin collections and public support for the Kmart Wishing Tree Appeal, increased from $9.4 to $10.7 million.
Maximising our energy efficiency
Kmart is committed to becoming more energy efficient and has continued to drive energy reductions throughout the year.
The business has replaced all metal halide lights in Kmart stores with LED alternatives that use 50 per cent less energy. Kmart is now planning to trial LED fittings to replace fluorescent tubes.
This year Kmart developed an energy-efficient road map to outline a range of initiatives that are suitable for implementation or trials. The road map also includes initiatives that are not currently suitable or are emerging technologies that the business will continue to monitor. Work has already commenced on implementing initiatives from the road map, including LEDs and smart meters, which aim to deliver energy reductions of more than 35 per cent.
Reducing our packaging
This year Kmart has conducted an evaluation of four packaging categories to ascertain areas for improvement. Products were reviewed in the stationery, recreational toys, garden, bed linen and kitchenware categories.
One key opportunity identified was to ensure similar products are packaged consistently to minimise waste. With this in mind, the business is now working to develop packaging guidelines for the sourcing teams to use when speaking with factories. These guidelines will help teams to identify different alternatives and give them the tools they need to make changes.