environmental sustainability

The Environmental Management System (“EMS”) includes the following:

• identification of the direct and indirect environmental impacts of the group;
• an environmental policy which is relevant and achievabIe;
• improving the direct impact of business activities where economically viable; and
• creating awareness with stakeholders through the appropriate level of reporting.

The group’s environmental practices will evolve, guided by environmental principles, economic drivers and the commitment to being a responsible corporate citizen.

RESPONSIBILITY

The board is responsible for the group’s environmental sustainability policy. The Risk Committee assists the board in carrying out its responsibilities. The Chief Risk Officer is responsible for co-ordinating the environmental sustainability policy. The implementation of the policy is the responsibility of executive management.

Environmental policy statement

The group acknowledges that it has an impact on the environment, both directly through electricity, fuel and materials consumed in its operations and indirectly through impacts associated with the production, use and end-of-life disposal of the products it sells.

As a company, we are committed to improving the environmental performance in all our brands within operations and those parts of the supply chain over which we exercise control.

Our action plan includes:

• ensuring compliance with relevant environmental policies and legislation;
• optimising electricity and fuel usage through energy-efficient practices, technological interventions, logistics and fleet management;
• reducing waste by recycling;
• encouraging suppliers to optimally use water, raw materials, energy and packaging in their production processes; and
• selecting energy and water-efficient product lines and minimising end-of-life waste generation by sourcing products which are durable and readily reused, recycled or dismantled at the end of their useful life.

We aim to assign adequate resources and establish accountability at all levels of management. Developing appropriate data collection and management systems for ongoing measurement and monitoring of environmental information. Establishing performance indicators and targets to guide and assess our performance. The group undertakes to report openly on its environmental impact and progress towards meeting goals.

CARBON FOOTPRINT

A carbon footprint assessment was performed by independent environmental specialists for the financial years ending 31 March 2010 and 2011. The footprint was calculated for Scope 1 and 2 Greenhouse Gas (“GHG”) emissions utilising the Greenhouse Gas (“GHG”) protocol. Scope 1 is the direct impact of the group’s activities – fuel combustion in company vehicles. Scope 2 is indirect emissions resulting from electricity consumption.

Carbon footprint results

The carbon footprint of the Lewis Group in South Africa was estimated at 46 600 tonnes of carbon dioxide equivalent (CO ₂ e) in the 2011 year. The footprint of the group’s overall operations, including South African and international operations, was in the order of 50 400 tonnes CO ₂ e in this period. The breakdown is presented below.

SCOPE	Source	2011	2010
		Emissions estimate	Emissions estimate
		(Tonnes CO 2 e)	(Tonnes CO 2 e)
SCOPE 1	South African fuel	22 000	21 600
	International fuel	1 900	2 500
	Total Scope 1	23 900	24 100
SCOPE 2	South African electricity	24 600	25 950
	International electricity	1 900	2 250
	Total Scope 2	26 500	28 200
	TOTAL SOUTH AFRICA	46 600	47 550
	TOTAL INTERNATIONAL	3 800	4 750
	GRAND TOTAL EMISSIONS	50 400	52 300

The following key performance indicators are presented and compared to the previous year.

	EMISSIONS INTENSITY	ENERGY INTENSITY	EMISSIONS INTENSITY	EMISSIONS INTENSITY
	(t CO 2 e per Rm sales	(kWh/m 2 trading area)	(kg CO 2 e/m 2 trading area)	(t CO 2 e/full-time employee)
	revenue)
2011	12.3	110	224	7.56
2010	12.6	119	230	7.74

QUALITATIVE ASSESSMENT OF BROADER ENVIRONMENTAL ISSUES

A qualitative assessment of several general environmental concerns, including Scope 3 carbon emissions, was undertaken as a supplement to the carbon footprint assessment. The environmental impact of each element in the Lewis Group supply chain was assessed from a life cycle perspective. The elements included:

• Product manufacture considerations (design; wood usage; minimising hazardous chemical use and green procurement)
• Transport and warehousing
• Packaging
• Retail (energy; paper and water usage)
• Product end-of-life

ACTIONS REDUCING ENVIRONMENTAL IMPACTS

• Fuel consumption – is strictly managed by operational procedures, which includes driver training, vehicle inspections and the daily monitoring of fuel usage.
• Electricity consumption – is managed by operational procedures, which includes minimising lighting in stores at night, monitoring the air-conditioning systems usage (i.e. temperature settings) and creating staff awareness. Energy-efficient lighting technology is used in new stores and in the maintenance programmes.
• Material usage – a pilot project is under way to reduce the usage of paper in stores by utilising digital pen and paper technology.
• Recycling – activities include the recycling of printer cartridges and paper.

TARGETS FOR EMISSION REDUCTION

Currently the group is not in a position to set emission reduction targets without more history being gathered. Targets will be set after the completion of the next carbon footprint assessment for the 2012 financial year.