We strive to reduce the emissions intensity of our businesses and improve their resilience to climate change.
We acknowledge that the world is changing due to climate change. Many communities are experiencing the effects of rising temperatures, water shortages and increasingly scarce food supplies. These changes will continue to have serious implications for our employees, our customers, the community and the economy.
We want to be proactive about managing these risks because responding to climate change will deliver significant economic, social and environmental benefits for us all.
Our divisions respond to climate change in two ways. Firstly, we actively monitor and manage our own greenhouse gas emissions and reduce them where possible. Secondly, we work to understand the specific risks created by climate change for our businesses and address those risks.
Our position on climate change
We recognise that the climate is changing due to human actions and we acknowledge that business and Australia have a part to play in mitigating this climate change.
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. We believe industry and governments must continue to work together to achieve this outcome. Long-term policy certainty is a pre-requisite for decarbonisation to occur efficiently and affordably. We will continue to improve the greenhouse gas efficiency of our operations, which reduces our own business costs and risk, as well as contributing to climate change mitigation.
As the global population steadily grows, the continued development of emerging economies depends on access to affordable energy. Both renewables and lower-emission fossil fuels will form an integral part of the energy generation mix throughout the transition to a low emission global economy. For more information about our investment in coal assets, click here.
"The science is clear: globally, we must reduce greenhouse gas emissions to limit the rise in the earth's temperature. Wesfarmers, like all other businesses, communities and governments, must do everything it can to make a positive difference." Richard Goyder, Managing Director
Managing our emissions
Our divisions are continually looking for ways to improve energy efficiency, reduce emissions across their operations and supply chains and invest in low-emissions and renewable technologies.
We emit greenhouse gases both directly and indirectly. Our direct (scope one) emissions mainly come from our industrial businesses, including the use of natural gas and diesel, ammonia and fugitive emissions from coal mining. Our main source of indirect (scope two) emissions is electricity used in our operations. We also estimate other indirect (scope three) emissions that occur as a result of our operations such as air travel, but are not controlled by us.
We are able to manage our emissions intensity through technology improvements in our industrial processes and through energy efficiency initiatives in all our businesses.
This year, we emitted a total of 3.9 million tonnes carbon dioxide equivalent (CO2e) in scope one and two emissions, which was more than two per cent lower than last year. Our emissions intensity decreased by eight per cent compared to last year, with 59.3 tonnes CO2e emitted per million dollars of revenue.
This year, the reduction in our emissions was driven by continued monitoring and management of electricity use across all sites.
The majority of energy used in our retail businesses relates to lighting and climate control as well as refrigeration at Coles. Our total energy use decreased by 2.2 per cent compared to last year with an energy intensity for all energy consumed for 457 gigajoules per million dollars of revenue. Bunnings' energy use has increased by 13 per cent because of higher electricity consumption due to the growth of its business operations and WesCEF’s energy use increased by 1.2 per cent due to extended operating hours across its plants.
Our retailers all invested in LED lighting upgrades in some of their stores, with Kmart recording an average reduction in energy consumption of 31 per cent for stores where LED lighting has been implemented to date. Bunnings continued to rollout solar photovoltaic systems projects at some of its stores, generating between 10 and 20 per cent of the stores’ daily energy needs. Officeworks has upgraded the printers in the print and copy centres in each store. As a result, the energy consumed per 1,000 prints has reduced by 16 per cent. At Target, energy use is down and in turn scope one and two emissions have reduced. This is due to continued monitoring and management of electricity use across all sites and investment in LED lighting upgrades to 104 stores completed in November 2015.
This year, WesCEF's greenhouse gas emissions increased by 6.3 per cent compared to last year as a result of increased operating hours across its plants. The performance of the nitrous oxide abatement technology installed in CSBP’s nitric acid plants continues to minimise greenhouse gas emissions. An average 90 per cent total nitrous oxide abatement was achieved during the year, which equates to a reduction of 1,220,422 tonnes of CO2-e.
This year, we have estimated scope three emissions of 769,000 tonnes CO2e. This includes:
We also measure the emissions attributable to our share of ownership of our joint ventures. This year our joint ventures Bengalla, QNP, Wespine and Quadrant Energy emitted approximately 483,990 tonnes CO2e.
Click here for more detail on our greenhouse gas emissions reporting.
Adapting for climate change
Increased weather volatility, more frequent extreme weather events, higher average temperatures and drier climates all have the potential to impact our operations and supply chains, in a range of ways. This year, we increased our focus on testing the robustness of our businesses against climate change and integrated it into our company-wide risk management process. We use CSIRO data to inform climate resilience planning at a divisional level, improving understanding of the material climate change issues that face our divisions. In this formal risk assessment process, the risks and opportunities are ranked according to the level of significance to Wesfarmers and include physical, regulatory, reputational and competitive risks.
Our analysis has found that climate change will exacerbate existing risks such as extreme weather events while also exposing our divisions to new risks like increased heating, ventilation and air conditioner (HVAC) costs due to unseasonable weather. We have put in place mitigation strategies to deal with these risks associated with climate change. For example, business continuity plans are critical to ensure Coles can continue to supply regions during times of extreme weather events.
We are committed to contributing to ecosystem resilience. For example, protecting biodiversity is a material issue for Wesfarmers Resources, as Curragh must carefully manage its ecosystems to protect flora and fauna on-site to meet its environmental approval conditions. As part of this management process, an offset area has been established at Mt Flora to compensate for the loss of 220 hectares of Brigalow ecological community associated with the approval of mining development at Curragh.
Since 1 July 2015 we have used an internal shadow carbon price in capital allocation processes. This shadow carbon price is designed to promote marginal emissions abatement projects and to ensure that regulatory, reputational and stranded asset risk are taken into account in relation to emissions intensive investments.
Shadow carbon price to promote emissions abatement
We are committed to being responsible stewards of the natural resources we use in our operations. Forests are a critical part of our efforts to reduce greenhouse gas emissions and our divisions are focused on ensuring the forestry products they source are from legal and well managed forests. For example, Officeworks recognises and prioritises 100 per cent recycled content or Forest Stewardship Council (FSC) certification as best practice. As a result, all Officeworks suppliers are required to complete a forest survey detailing the source of any paper or wood products. As of June 2016, the survey has been completed for products representing more than 99 per cent of Officeworks' paper or wood product sales.
This year, some stakeholders have raised concerns about Wesfarmers’ investment in coal assets. Most coal from our wholly-owned Curragh coal mine is metallurgical coal, which is a necessary component in the steel-making process. We do produce some thermal coal at Curragh and in our joint venture Bengalla mine. For more information about our investment in coal assets, click here.
Our divisions are committed to helping customers avoid greenhouse gas emissions. For example, Bunnings continues to provide information and education to help customers make sustainable living choices and take practical actions at low cost or no cost to save energy, use less water and reduce waste. This includes providing a wide range of expert advice in-store and online, free DIY workshops and DIY how-to guides.
Officeworks is Australia's largest retail collector of used printer cartridges, computers and electronic accessories. Through recycling these materials, Officeworks has reduced the need for resource extraction, thus reducing the carbon intensity of its products.
Other environmental reporting
We are committed to transparent and open communications about our management of the environment, with a broad range of stakeholders including customers, employees, investors, governments and non-governmental organisations.
We have an ongoing program of engagement with investors and continually look for opportunities to enhance our disclosure. The Carbon Disclosure Project (CDP) is the primary investor benchmarking tool for climate change performance. Wesfarmers responds to CDP's 'Investor Request' on climate change and forests through our annual voluntary submission. Wesfarmers’ responses are available on the CDP website.
Two of our businesses, WesCEF and Resources, are required to report under the National Pollutant Inventory (NPI). Full details are available on the NPI website, with 2014/15 data available.
The activities of our divisions are subject to environmental regulation by various authorities throughout the countries where we operate. Licences granted to our divisions regulate the management of air and water quality and quantity, the storage and carriage of hazardous materials, the disposal of waste and other environmental matters associated with the entity’s operations. During the year, there have been no known material breaches of our divisions’ licence conditions. Details of WesCEF's potential environmental non-conformances can be found here.
GRI Reference: G4-DMA (Product and Services), G4-DMA (Energy), G4-DMA (Emissions), G4-DMA (Overall), G4-EN5, G4-14, G4-EN15, G4-EN16, G4-EN17, G4-EN27, G4-EN31