Coles provides fresh food, groceries, general merchandise, liquor, fuel and financial services to more than 21 million customers on average each week through its store network and online channels.
In the spirit of 'a little better every day', our business focuses on the following key areas to improve our sustainability:
- Australian sourcing
- Supplier collaboration
- Community partnerships and support
- Economic contribution
- Product quality and safety
- Certification and labelling
- Labour rights
- Energy efficiency
- Managing waste and recycling
- Employee career development
- Job creation
- Health and safety
Australian sourcing and supplier collaboration
Working with Australian farmers, producers and growers is at the heart of everything we do. Our Australian Sourcing policy means whenever and wherever possible we support Australian-made and we only import product when it is not grown or produced in Australia or where we cannot secure sufficient quantities to meet customer demand. This focus has enabled us to source 96 per cent of our fresh fruit and vegetables from Australian growers, 100 per cent of our fresh milk and eggs and 100 per cent of fresh meat from the meat department from Australian producers.
During the year, Coles also signed the Food and Grocery Code and issued new code compliant terms and conditions relating to supply agreements to all Coles suppliers. By June 30 2016, more than 1,200 suppliers signed up to code compliant terms and conditions.
Coles is committed to supporting our suppliers so that they can grow their business alongside us and continue to deliver great products for our customers. The Coles Farm Program is designed to help our suppliers share the great work they are doing to enhance the sustainability of their farming operations, as well as support investment in training for their employees. The Coles Farm Program is app-based and readily accessible for our suppliers, allowing us to further improve traceability, monitor environmental performance and support best-practice farming.
Coles Nurture Fund
In April 2015, we launched the Coles Nurture Fund and committed $50 million over five years in grants and interest-free loans to help small Australian producers, farmers and manufacturers innovate and grow their business. We believe by investing in innovation we can help businesses to develop new products and technologies to expand their operations.
In the first round of funding, nine businesses were offered a grant or interest-free loan of up to $500,000 and successful applicants in the second and third round of funding will be notified by the end of 2016. Further information about the Coles Nurture Fund can be accessed via www.coles.com.au/nurturefund
Western Australian small business Three Farmers is a successful Coles Nurture Fund applicant who received a $500,000 grant to help build the first quinoa processing plant on mainland Australia. By growing and processing white quinoa at Narrogin, Western Australia, the Wiese family from Three Farmers has helped to reduce imports from South America.
"Without these funds we were actually looking at sending quinoa to America for processing and bringing it home again, which is obviously a lot of food miles and something our customers don't want." Ashley Wiese - Three Farmers
The new processing plant at Narrogin has enabled Three Farmers to sell Coles brand White Quinoa as well as the company’s own branded quinoa product, Three Farmers Golden Quinoa, exclusively at Coles.
Community partnerships and support
Each year Coles supports national and local charities with fundraising activity, donations of food and disaster relief. This year our direct community investment was $43.9 million with an additional $7.8 million contributed by our customers, team members and suppliers.
Coles’ partnership with national cancer charity Redkite started in 2013, and since then we have raised more than $19 million for Australian families affected by cancer. Redkite supports children and young people with cancer and the Coles partnership helps to fund counselling and practical care for families across Australia. Our support also extends to vital financial assistance, education and career support services. The Redkite and Coles 'Dare to Dream' scholarships enable young people with cancer, or who are survivors of cancer, to follow their dreams and ambitions.
In April 2016, Coles ran a national ANZAC Day fundraising campaign for Bravery Trust, raising more than $600,000 through customer fundraising and sales of ANZAC biscuits.
Since our partnership began in 2014, Coles has raised more than $4.3 million for Bravery Trust who provide vital financial support to current and former members of the Australian Defence Force and their families who have suffered hardship as a result of their service.
The teams across our liquor business raised more than $250,000 for food rescue partner SecondBite. The Coles 'Community Food with SecondBite' program continues to grow, with donations of fresh fruit, vegetables and bakery items coming from more than 600 stores in our network. Since our partnership began in late 2011, Coles has donated more than 15 million kilograms of food.
After 20 years in partnership, Coles supermarkets ran its final Daffodil Day campaign to raise more than $1.3 million for the Cancer Council. Coles Express now leads the partnership and raised more than $1.2 million during the year.
The Coles Express team also contributed to support Indigenous youth charity Red Dust Role Models through regular payroll giving. Over the last three years 27 team members volunteered their time to assist the delivery of healthy living programs in the remote community of Daly River in the Northern Territory. Coles continues to support Indigenous Australians through the Coles Indigenous Food Fund which promotes native bush foods and supports Indigenous enterprise.
Coles supported relief efforts with the Pinery bushfires in South Australia, along the Surf Coast in Victoria and in the community of Waroona-Yarloop in Western Australia. In South Australia, Coles donated $10,000 and raised more than $6,000 through community fundraising for the SA Pinery Fire Appeal. In Victoria, Coles stores along the Surf Coast raised $20,000 through customer donations for their local Country Fire Authority brigade in Wye River and to support the broader coastal area. In Western Australia, Coles donated $25,000 and raised more than $210,000 to support Red Cross disaster relief and recovery work. Coles team members worked with local organisations to help distribute groceries and supplies to affected members of the community.
Product quality and safety
As part of our strategy to deliver quality, affordable products to our customers, we regularly review and improve our Coles brand range. We have invested in developing the Coles Food Manufacturing Supplier Requirements to support suppliers in demonstrating compliance and traceability.
Over the past year, Coles brand products won 151 industry awards ranging from fine food awards to consumer choice awards.
During the year, four Coles brand products were recalled and we have actively engaged with our suppliers to support them in making improvements to mitigate these recalls from occurring in the future.
Coles is a member of the Healthy Food Partnership which is a Federal Government initiative that aims to raise awareness and encourage Australians to make healthier food choices. Through this collaborative process we have reduced sodium in our bread, breakfast cereals, cheddar and mozzarella cheese, savoury pies and sausage rolls, hams, bacons and smallgoods, savoury crackers, simmer sauces, snack foods and soups.
Coles engaged with the Federal Government to provide input into the development of the new country of origin labelling system. We are currently making preparations to roll out new labelling across our suite of Coles brand products. Health star rating nutrition labelling on the front of pack has now been rolled out to more than 1,500 Coles brand products. We actively sought feedback from our customers to identify which products to prioritise during this process to ensure customers can compare the nutritional profile of packaged food.
Responsible service of alcohol and gaming
Coles takes the responsible service of alcohol seriously, and we participate in industry-wide initiatives that are designed to produce better health outcomes for our customers. Coles Liquor is a signatory to the Alcohol Beverage Advertising Code (ABAC), and is committed to ensuring all of our advertisements and communications support responsible alcohol consumption messages. ABAC’s standards for alcohol advertising, which includes labelling, have been incorporated into the Coles Liquor Responsible Advertising and Responsible Ranging guidelines.
Since 2011, Coles Liquor has participated in DrinkWise Australia, an industry-led, not-for-profit organisation advocating a healthier and safer drinking culture in Australia. To promote responsible drinking, our entire exclusive and private label liquor range carry the DrinkWise pregnancy labels.
Our liquor stores are members of 196 Accords throughout the country. The Accords assist in stakeholder engagement with local authorities, councils and other licensees to find collaborative solutions to local problems. Coles Liquor was a co-founder in establishing the Darwin City Liquor Accord, and our stores in Geelong, Victoria, were part of the first Accord specific to packaged liquor which focuses on targeted solutions to issues facing local retail outlets.
With the support of the Coles Indigenous Affairs team, Coles Liquor launched its first cultural awareness program in Broome, Western Australia in November 2015, followed by a second session in Darwin, Northern Territory, in March 2016. The program is designed for store team members to better understand and build better relationships with Indigenous communities in which we operate.
Coles Liquor released online Responsible Service of Alcohol (RSA) training modules for team members to replace the previous paper-based training. The online RSA modules are a centrally-monitored training and assessment module that is interactive to support learning and compliance.
This year, Coles Liquor introduced a cash-register tool, 'ID25'. It is designed to improve awareness and support store teams in making better decisions regarding the responsible service of alcohol. As part of this national initiative, team members prompt customers for age identification at the point of sale and record the relevant data to ensure compliance.
Our hotel business, Spirit Hotels, supported Responsible Gambling Week in Queensland. For more information about our responsible gambling approach, click here.
Certification and labelling and labour rights
Coles brand is committed to only selling responsibly sourced seafood. This means all wild fisheries and aquaculture farms that supply Coles have been independently assessed. Now all fresh, frozen and canned Coles brand seafood meets either the Marine Stewardship Council (MSC) certification, Aquaculture Stewardship Council (ASC) certification or Coles Responsibly Sourced Seafood criteria. Our Responsibly Sourced Seafood program has enabled us to be the first major Australian supermarket to sell ASC-certified fresh salmon. During the year we made a significant contribution to World Wide Fund for Nature (WWF) to support the conservation of Australia’s unique marine habitats.
Meat and poultry
Since 2011, our Coles brand suppliers have met specific sourcing requirements or been independently assessed to a higher animal welfare standard.
- Coles brand fresh beef range: no added hormone beef since January 2011
- Coles brand fresh eggs range: cage free since January 2013
- Coles brand RSPCA approved barn laid eggs: since January 2013
- Coles brand fresh chicken: RSPCA approved since January 2014
- Coles brand whole turkey: RSPCA approved since December 2014
- Coles brand fresh pork: sow stall free since January 2014
We are also extending these animal welfare requirements into other Coles brand products, for example, our fresh sandwiches range includes sow stall free ham and RSPCA certified chicken, and our convenience meals have no added hormone beef. To support these higher animal welfare initiatives we have incorporated these standards into the Coles Farm Program. This year we have made responsibly sourced products more accessible and affordable to our customers by investing in value and supported by an extensive communication campaign. We also continue to develop products in guidance with our no animal testing policy, verifying that all Coles brand food and non-food products do not test finished products on animals.
All palm oil used in our Coles brand food and drink products is sustainable palm oil. We are now progressing the conversion of Coles brand homecare, health, beauty and baby products to use sustainable palm oil and palm oil derivatives. To off-set the use of palm oil in Coles brand non-food products yet to be converted, we purchase GreenPalm certificates which support sustainable palm oil farmers and processors.
Timber and paper products
This year, we have increased the number of Coles brand paper and timber products that are certified to sustainable forestry standards, Forest Stewardship Council (FSC) and Program for the Endorsement of Forest Certification (PEFC). During the year we also launched Coles brand paper towels made from 100 per cent recycled paper to meet increasing customer demand for sustainable paper products.
Cocoa, tea and coffee
All of our tea and coffee products have been certified by Fairtrade or UTZ. This year Coles launched 16 new products which were ethically certified, including four variants of Belgium block chocolate.
As a large Australian retailer we are committed to the purchase of goods and services that are manufactured and provided in a way that does not involve exploitation, or represent a danger to health, safety or the environment. Our Ethical Sourcing Policy provides clear guidance to our team members and suppliers about the requirements in supplying products to Coles and is communicated to all suppliers as part of our trading terms and conditions.
Our policy is based primarily on the Ethical Trade Initiative and the International Labour Organisation (ILO) conventions, and risk assessments are conducted alongside independent third party audits for higher risk suppliers. In the past year, our audit process identified one breach of our policy, which related to a forced labour issue in our Thai supply chain. This issue was successfully resolved by correcting processes on-site and providing training directly to factory management by Coles team members.
We actively engage with social justice non-government organisations and other stakeholders and participate in key social improvement programs to address labour practices in specific countries and industries.
We are ‘buyer partners’ with Better Work, which is a joint program between the ILO and the International Finance Corporation. We collaborate with regional partners to improve working conditions at factories from which we source our MIX clothing range. This year, we completed a study with the ILO to pilot a meals program at one of our factories in Cambodia.
We are making preparations to launch SEDEX (Supplier Ethical Data Exchange) to streamline ethical compliance and monitoring, and provide efficiencies to our suppliers. SEDEX will facilitate risk assessment and an information sharing platform for social compliance audits to maintain visibility and drive consistency across our supply chain.
More than 80 per cent of the volume of Coles brand food and drink is sourced in Australia. Coles continues to work closely with our Australian fresh produce and meat suppliers, and cross-industry working groups, to address unfair and illegal labour conditions on supplier farms and processing sites, particularly relating to seasonal labour hire and workers on temporary working visas.
This year we established a wages and conditions hotline for farm and factory workers. In Australia, employees who work for a Coles supplier can call the hotline and learn more about their conditions of employment or report unfair labour practices. For workers where English is not their first language, we provide alternative options for communicating their concerns or learning more about their rights.
More than 80 per cent of the volume of Coles brand food and drink is sourced in Australia.
Reducing our environmental impact
We have a responsibility to our customers, our suppliers, the community and the environment. We are committed to reducing our impact on the environment and we are investing in projects and partnerships to achieve this goal.
Managing waste, recycling and packaging
This year, the total amount of waste recycled by Coles increased by 11.8 per cent* compared to last year, and waste to landfill increased by 10.8 per cent. We have been working hard to identify opportunities to divert organic waste from landfill and initiated a program this year in selected New South Wales supermarkets where more than 3,000 additional tonnes of organic material was converted to energy. Overall, our recycling rate was 72 per cent of total waste and remains consistent with last year.
As one of Australia’s largest food retailers, our main sources of waste are cardboard, food and plastic and we have comprehensive strategies to recycle and divert waste from landfill for these components. The largest component of our recycling stream is cardboard, and this year our stores recycled 5.3 per cent more than last year. We donated more than 7,800 tonnes of food via our partnerships with SecondBite and Foodbank, a 50 per cent increase on last year. This year, our customers returned more than 299 tonnes of soft plastic to our stores to be recycled via the REDcycle program which recycles plastic bags and packaging, and is now available at more than 500 supermarkets.
Coles regularly reviews its product packaging to ensure it is aligned with the sustainable packaging guidelines as outlined by the Australian Packaging Covenant. All packaging development is subject to the requirements of our Sustainable Packaging Policy which commits Coles brand to improve recycling communication on pack, and maximise the use of recyclable and recycled materials.
During the year, we initiated a project to minimise the use of polystyrene in our business. We have replaced polystyrene boxes with lined reusable crates in our supply chain when transporting fresh broccoli to our stores. This trial is scheduled to be expanded to other parts of our fresh supply chain.
The majority of energy used in Coles stores relates to refrigeration, lighting and climate control. We have been focusing our efforts to identify opportunities to reduce our overall energy use. Our total energy use decreased by 0.3 per cent compared to last year.
Our energy centre continuously monitors the energy consumption of our supermarkets and facilitates a deeper understanding of opportunities for improvement. Last year, 3,300 issues were identified and corrected, conserving enough energy to power 2,500 homes for a year.
As part of our commitment to energy reduction we have continued our rollout of energy efficient LED lighting, retrofitting a further 180 stores. We have now introduced projects to include LED technology into more than 300 of our supermarkets. Coles continued to invest in energy saving projects to improve electrical infrastructure and upgrade systems and this year saved enough energy to power a further 3,300 homes for a year.
We were proud to launch the first Australian supermarket, Coburg North in Victoria, to use 100 per cent natural refrigerant in a combined refrigeration and air conditioning system. We are deploying this energy efficient refrigerant across our network and have since converted 120 stores to include natural refrigerant.
Building on the success of achieving the first Green Star rating for an Australian supermarket in 2015, Coles collaborated with the Green Building Council of Australia to develop an industry recognised assessment tool which we plan to integrate into the design process for all future supermarket builds.
*This is an estimate based on 20,330kL of liquid waste recycled in 2015 which was not reported in Coles total waste figures
Career development and diversity
Our total workforce increased during the year to 102,879, including our expanded graduate program which currently has more than 350 graduates across both our store support centre and operations functions. More than 800 team members took part in our Retail Leaders Program, which is the key training platform for a career in store management.
Pay and conditions
In May 2015, Coles Supermarket team members voted overwhelmingly in favour of the Coles Store Team Enterprise Agreement 2014-2017 and, in July 2015, that Agreement was approved by the Fair Work Commission.
Subsequently, an appeal was lodged with the Commission by a single part time team member, challenging the Commission's approval of the Agreement and in May 2016, the Full Bench of the Commission determined that the Agreement did not pass the Better Off Overall Test.
The majority of team members are now covered by the previous 2011 Agreement, most meat team members are covered by the previous State-based agreements and a small number of team members (Coles Online Customer Service Agents) are covered by the General Retail Industry Award.
Despite this change, Coles honoured the wage increase that was scheduled under the 2014 Agreement in July and ensured that, while we consider the best way forward, Coles team members did not see any reduction in their base rate of pay.
In July 2016, an individual Coles team member filed an application to terminate the 2011 Agreement. This matter is currently before the Commission.
Diversity at Coles
Coles’ self-identified Indigenous team members increased this year to more than 2,300 which is 2.2 per cent of our workforce. Our target is for Indigenous employees to make up three per cent of our workforce, which is reflective of the working age Indigenous population of Australia.
A central component of our Indigenous employment program is our three-week pre-employment course for Indigenous people called 'First Steps', which operates in communities where there is a significant Indigenous population with a minimum of 15 job vacancies. Coles was awarded the Australian Human Rights Commission’s 2015 Human Rights Business Award in recognition of this innovative program.
Our Indigenous employment strategy identifies and caters for the specific needs of Indigenous communities throughout Australia. We partnered with Aboriginal development organisation, Wunan, to develop a tailored employment support program for the community of Kununurra, Western Australia. This has resulted in the number of Indigenous team members in our Kununurra supermarket increasing from three to 13.
We are taking a holistic approach to Indigenous employment and have partnered with Wunan Kimberley Education Excellence program which supports young Indigenous Australians to access education.
Women in Leadership
Coles is continuing a focus on increasing numbers of women in leadership positions within our business. This program is supported by a central strategy and complementary, tailored strategies specific to each function of our business. This approach has resulted in women promoted into areas of the business where leadership positions have not traditionally been held by women, such as operational roles in supermarkets and Coles Express.
A key pillar of our 'building great careers' strategy is Pride@Coles, our lesbian, gay, bisexual, trans and intersex (LGBTI) support group. This year, Coles was a sponsor of Melbourne’s annual Midsumma Pride Festival where team members marched under the Coles banner. We will sponsor the festival again next year. We have also partnered with a leading business school to evaluate our progress on our broader diversity framework and endeavour to develop our Pride@Coles strategy in conjunction with this work.
In December 2015 Coles launched its Accessibility Action Plan with the Australian Human Rights Commission. The plan demonstrates our commitment to improve our support and access for team members and customers with a disability. To develop this plan we sought direct feedback from people with a disability to identify opportunities for improving the way we operate. Our accessibility working group is accountable for the implementation and monitoring of the Coles accessibility commitments and meets on a regular basis to review progress.
During the year, we continued to work with the Australian Network on Disability and participated in the Stepping Into Internship program, which provides paid work experience specifically designed for university students with a disability.
This year, every supermarket with a fleet of trolleys now has an additional needs trolley to make shopping easier for parents and carers of children with a disability. Building on the success of this program we have initiated a comprehensive review of car parking facilities to ensure visitors with a disability can easily access our stores. Projects initiated during the year include extending the width of disabled parking bays beyond the requirements of Australian standards and designing our carpark spaces to facilitate easier access for those with a disability. We have sought feedback from our customers to identify opportunities for improvement and actively engage with stakeholders to provide more accessible parking for our customers and team members.
Health and safety
Maintaining a safe workplace for our team members and keeping our customers, suppliers and other visitors safe across all our sites is paramount. This year, our TRIFR was 44.6, a 17.3 per cent improvement on last year due to our focus on safety leadership, risk reduction and our 'Mind Your Health' program. We operate disciplined reporting functions, and verify our TRIFR and LTIFR using cross comparisons between workers compensation claims and incident data using our online incident capture system. With an increased focus on TRIFR, our LTIFR increased marginally by 3.5 per cent to 8.4.
During the year we implemented a new competency-based safety refresher and audit program, including facilitating safety master classes for regional managers. These safety initiatives included focusing store managers to lead continual improvement in safety culture in supermarkets, and the logistics business introduced two key programs in manual handling and traffic management. All brands continued their focus on effective incident investigation to root cause and continual design improvements. These programs all contributed to Coles continually improving safety performance.
As part of creating a mentally healthy workplace, Coles launched the ‘Mind Your Health’ program with three pillars in the strategy: awareness; leadership; and risk reduction. Mental health is a key pillar of Coles’ safety strategy and this year we have invested in online health assessments, education campaigns and trained more than 600 line managers, human resource and safety professionals in mental health first aid. We have also created the online resource for all team members. Beyondblue has been a key partner for Coles in delivering these programs.
44.6total recordable injury frequency rate
2Restated due to maturation of data
Linking mental health to the importance of being physically healthy, and building on the success of the ‘Express Steps’ program in Coles Express in December 2015, Spirit Hotels launched ‘Spirit Steps’.The initiative encourages team members to make positive choices to improve physical fitness and wellbeing and track their progress with Fitbit devices. Team members are reporting positive outcomes and the program will be extended through the business in 2016.
Sustainable improvements in safety will continue to be central to our operations and we remain focused on safety leadership, strategies targeting risk reduction and improving our physical and mental health.
Coles is committed to offering customers everyday value, quality fresh produce and a better shopping experience. It is important that we operate our business sustainably and in a responsible way. We will continue to focus on the following priorities over the coming year:
- building stronger, deeper relationships with suppliers through fair dealings and long-term contracts;
- increasing the transparency of our supply chain;
- working with industry and government to improve contract labour practices for Australia's fresh produce industry;
- driving responsibly and ethically sourced products for Coles brand;
- diverting more waste from landfill, expanding our use of recyclable packaging and maximising store recycling programs;
- making our stores more energy efficient;
- increasing the diversity of our workforce with greater Indigenous representation and providing workplace flexibility;
- engaging our stores and operations to make a step-change improvement in safety performance;
- promoting mental health among team members.
GRI Reference: G4-DMA (Product and Service Labelling), G4-12, G4-EN33, G4-PR3