Why is this material to our business?

Reducing waste not only minimises our impact on the environment - it makes good business sense. Woolworths pays for every kilogram of waste we put into a rubbish bin and goes to landfill. When we recycle we get revenue for some of these materials.

What is our commitment?

In our Sustainability Strategy 2007-2015 we set the following commitments and targets:

• Identify organics recycling technologies similar to EarthPower for recycling source-separated food waste from supermarkets outside Sydney and determine commercial feasibility
• Implement a waste audit program for all stores and Distribution Centres
• Continue phasing out polystyrene
• Implement a staff education program to encourage greater recovery of plastic and cardboard
• Increase the number of Sydney stores using EarthPower from 53 to 100 by 2010
• Eliminate food waste from the general waste stream by 2015 (where receiving facilities are available)
• Reduce amount of plastic in the general waste stream to less than 1% by weight by 2010
• Reduce amount of cardboard in the general waste stream to less than 1% by weight by 2010.

How are we performing?

In Australia, the volumes of waste(1) to landfill and materials recycled increased in 2009 as the company continued to open and operate new stores and as data collection and reporting improved.

In New Zealand, waste and recycling volumes decreased along with waste to landfill in 2009.

Organic waste

Fifty-three Woolworths supermarkets in Sydney send their organic waste to EarthPower, a reprocessing facility that produces green power and fertiliser from the waste. In 2009, we increased the volume of organic material dispatched to EarthPower by 8% up to 5,785 tonnes, generating about 1,850 MWh of electricity, enough to power 290 homes for a year.

Food Rescue program

Over the past year our supermarkets have focused on diverting fit-for-purpose food waste from landfill. Expanding upon our lengthy partnership with Foodbank, the Supermarkets division implemented its Food Rescue program, in which food fit for human consumption, but not for sale, is either transported back to the Distribution Centres for donation to Foodbank or donated to local, approved charities. More than 1,350 tonnes of food is diverted from waste through these programs. (More information on these is available in the Community Investment section.)

Produce and bread fit for animal consumption is also being diverted to wildlife carers and zoos.

Waste audits

Woolworths recycles more material than is sent to landfill, but there are always opportunities to divert more recyclable material from our rubbish bins.

A recent waste audit of 30 supermarkets nationally showed that our cardboard and paper recycling had not improved but our plastic recycling had increased. Plastics in the waste stream have decreased to 8% by weight (including 3% non-recyclable plastics) from 10% in 2007.

Further improvement is expected from the national roll-out of the Eco Ambassador program, which includes an Eco Ambassador in every supermarket and supporting processes and material to encourage improvement in recycling.

Electronic waste

As the world becomes more innovative the volume of electronic waste, or e-waste, is increasing. Dick Smith is a founding member of Product Stewardship Australia (PSA), an industry led organisation that is developing nationally consistent solutions for end-of-life electronic and electrical products.

In 2009, PSA has successfully escalated e-waste stewardship to a Federal level and is working with the Federal Government on legislation needed to support a national e-waste infrastructure.

Dick Smith collects mobile phones and accessories under the Mobile Muster program, printer cartridges in conjunction with Planet Ark and operates its own scheme for collecting and recycling batteries.

PAPER USE

From January to June 2009 we used 181,396 reams of paper in Australian Supermarkets, BIG W, BWS, logistics, support offices, petrol and Thomas Dux. In 2009 our two largest users of paper, the support offices at Norwest and Pennant Hills used a total of 41,590 reams.

In 2009, our retail businesses distributed 892 million catalogues in Australia and 148 million in New Zealand using 52,800 tonnes of paper. Our catalogues are a key marketing tool, liked by our customers and match our competitors' activities.

In an on-line survey of our registered Everyday Rewards customers in September 2008, our customers told us that 53% of them read the catalogues in full and 65% read the catalogues to find the specials.

BIODIVERSITY

Our property division complies with all federal, state and territory planning laws for all our store developments, in which we include a Statement of Environment Effect. Biodiversity and environment protection measures are identified as part of the development application and consent process and we fully comply with all consent conditions imposed by the relevant authorities.

The majority of our store developments are urban redevelopments or renewal of sites previously used for retail or commercial purposes. In 2009 we had 23 projects in construction, all of which had no biodiversity concerns or consent conditions.

Review of our existing facilities commenced in 2008. This is work in progress and with more than 3,000 sites it will take time to complete.

VOLUNTARY CODES AND REPORTING

National Packaging Covenant (NPC )

Woolworths Limited's NPC Annual Report and data for 2008 are available on the NPC website www.packagingcovenant.com.au. Our NPC annual report was approved and registered by the NPC on 1 April 2009. The assessors rated our report 3.1 stars out of the NPC 1-5 star rating system.

Carbon Disclosure Project (CDP )

Woolworths Limited has been a signatory to the CDP since 2007. Our 2008 report (CDP7) was submitted in May 2009. CDP is an independent not-for-profit organization that acts as an intermediary between shareholders and corporations on all climate change related issues, providing primary climate change data from the world's largest corporations to the global marketplace.

Woolworths Limited's CDP reports are all available from the CDP website at www.cdproject.net/.

Global Reporting Initiative (GRI ) and Accountability Standard

Woolworths Limited's annual corporate responsibility reports are based on the GRI (www.globalreporting.org) Sustainable Reporting Guidelines (G3). The Global Reporting Initiative is a network-based organisation that has pioneered the development of the world's most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide.

The reports are independently assured to AccountAbility's AA1000 Assurance Standard 2008 www.accountability21.net/.

United Nations Global Compact (UNGC )

In May 2009, Woolworths limited became a UNGC signatory. The United Nations Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. For more information go to www.unglobalcompact.org.

Compliance

Regulatory reporting

Woolworths Limited is required to report under the Energy Efficiency Opportunities (EEO) Act 2006 and the National Greenhouse and Energy Reporting (NGER) Act 2007. Our first EEO report is available on our corporate website homepage www.woolworthslimited.com.au. Our first NGER report is due by 31 October 2009 and will cover the financial year 2009. Our second EEO report for the 2009 financial year is due by 31 December 2009.

Spills

Woolworths Petrol had two spill incidents in 2009 at petrol stations in South Dandenong, Victoria, and Maddington West, Western Australia.

The South Dandenong service station spill occurred on 29 April 2009. The root cause analysis showed that the third-party carrier had misread the current dip figure and as a result over-filled one of the tanks. The overflow entered Eumemmerring Creek. The incident was reported to all relevant authorities. Police and fire brigade worked to contain the spill and EPA and Melbourne Water also attended to advise on any further action.

The contracted third-party carrier completed an incident investigation and a copy of the incident report has been provided to the EPA. No further information or outcomes have yet been provided by the EPA.

On 15 May 2009 a fuel tanker caught fire at Maddington West petrol station in Western Australia which resulted in fuel spilling into the stormwater drains surrounding the site. This incident is still the subject of investigation and no root cause has been identified.

Fines

In 2009, there were no environmental incidents that incurred monetary fines.

OTHER EMISSIONS

Ozone depleting substances

In 2009, total emissions of ozone depleting substances were 50,779 kg from refrigerant gas losses (primarily R22) from our air conditioning units.