INVESTEC BUSINESS SCHOOL

ASSIGNMENT COVER SHEET

MBA

NAME : GEORGE O. KWATENG

STUDENT NO. : 607K5593

MBA YEAR : 2007

MODULE : SUSTAINABILITY REPORTING

ASSIGNMENT TITLE : A CRITICAL ASSESSMENT OF THE

“TRIPLE BOTTOMLINE/SUSTANAIBILITY

REPORTING” OF PEPPER GROVE PICK n PAY

GRAHAMSTOWN.

LECTURER : DR. KEVIN WHITTINGTON-JONES

1

DUE DATE : 14 APRIL 2008

TABLE OF CONTENTS

1. Executive Summary

3

2. Introduction

3

3. Organisational Structure

4

4. Scope of Sustainability Reporting

5

5. Selection Methodology 5

5.1. Corporate Governance

6

5.1.1. Management and Performance

6

5.2. Environmental Sustainability

7

5.2.1. Policy 7

5.2.2. Management and Performance

9

2

5.2.3. Reporting and Consultation

12

5.3. Social Sustainability

12

5.3.1. Policy 12

5.3.2. Management and Performance

15

6. Challenges facing Pepper Grove Pick n Pay

16

7. Practical Suggestions to Sustainable Business

17

8. Conclusion 21

9. References 22

10. Appendix: JSE SRI

23

1. EXECUTIVE SUMMARY

Pick n Pay Grahamstown established more than ten years ago is

a branch of Pick n Pay Retailing (SA) (Pty) Ltd. The business

has wholeheartedly embraced the national policy on Sustainable

Business though on a limited scale and it tends to achieve a

long-term growth and survival. The major consideration here is3

the critical analysis of its Triple Bottom Line Reporting, the

assessment of the impacts on its policies, management and

implementation as well as the significance of its reporting.

2. INTRODUCTION

Pepper Grove Pick n Pay is situated at African Street in

Grahamstown and it is a Family Supermarket dealing in four

main classes of delicacies, fruits and vegetables, butchery

and bakery. It is a privately owned franchise trading under

Pick n Pay Retailers (Pty) Ltd. It has a strong and appealing

owner management role which underpins business growth and

success. By virtue of its franchising position, it does not

need to obtain approval from the Corporate Head Office in its

undertakings except in limited instances. Though the

principles of Corporate Governance are applied, its uniqueness

lies in its autonomy.

The business has two owners or directors namely Messrs Mark

Shelton and John Campbell with a branch in Port Alfred while

the Grahamstown Manager, Mr Shaun Cerini is a young,

enthusiastic, hardworking married gentleman who has built up

his career in retailing business.

The business has a philosophy of customer-centeredness and its

sustainable theme as: “Without the environment, the business cannot make a

profit and without a profit the business cannot support and promote social and

community development”.

4

Pick n Pay Grahamstown is a Corporate Citizen as defined in

the King II Report on Corporate Governance of South Africa

(Institute of Directors, 2001). This is due to its commitment

to contribute to sustainable economic development working with

its employees, the local community and society at large to

improve their quality of life. Triple Bottom Line Reporting

phrased by John Elkington in 1994 means expanding the

traditional reporting framework to take into account

environmental and social performance in addition to financial

performance. It is succinctly described as People, Planet and

Profit (World Business Council for Sustainable Development,

1999; World Wide Fund for Nature, 1999).

Pick n Pay Grahamstown has a Unitary Board structure which

conforms to King II Report on Corporate Governance because

there is a clearly defined line of hierarchical reporting

though at a limited scale. The diagram below illustrates its

organisational structure.

3. PICK N PAY RETAILING GRAHAMSTOWN ORGANISATIONAL STRUCTURE

5

OWNERS /DIRECTORS

[MARK SHELTON & JOHN CAMPBELL]

MANAGER

[SHAUN CERINI]

ASSISTANT MANAGERS

[CHRISTO PIENAAR & JOHAN BOSCH]

MANAGER

[SHAUN CERINI]

ASSISTANT MANAGERS

[CHRISTO PIENAAR & JOHAN BOSCH]

4. THE SCOPE OF SUSTAINABILITY REPORTING

I have limited the scope of 3BL–Reporting to the environmental

and social sustainanbility because:

- Pepper Grove Pick n Pay is a franchise and privately

owned and the management are not obliged by legislation

to provide public disclosure of its financial

information.

6

DELICACIES

LINDA KHOLA

GENERAL STAFF

DEPARTMENT SPECIALISTS

TRAINEE SPECIALISTS

BAKERY

CHARLES OPPERMAN

BUTCHERY

RUSSEL SHELTON

FRUIT &VEGETABLE

CHARL SWART

DEPARTMENT SPECIALISTS

TRAINEE SPECIALISTS

SUPERVISORS

DEPARTMENT SPECIALISTS

TRAINEE SPECIALISTS

- The business is limited in organisation and management to

an extent that some elements of the JSE SRIs Index and

Guidelines might not be applicable.

- Its business operations are confined to a limited local

environment on a limited scale.

And the direct impact of the business will include indicators

such as energy, water, lightings, physical area and size,

business restructuring, sanitation, waste, fuel usage, safety

and workplace etc. The indirect impacts will include

contractual obligations with specialised services such as its

auditors, suppliers and government. However, the economic,

environmental and social impacts are highlighted.

5. SELECTION METHODOLOGY

RATING SYSTEM

The evaluation, assessment and rating is undertaken only

qualitatively and not numerically and quantitatively due

to benchmarking limitations such as lack of industry

norms and data and appropriateness of measurement models

having meaningful empirical interpretation. How shall we

establish the relationship between energy and the size of

the market or quantity of water used in food processing

with number of sales?

Basically my assessment is broadly related to the JSE SRI

Selection Criteria and benchmarked against stated

commitment, policy, procedure etc of the very business.

7

The national key of measurement and rating used by the

entire Pick n Pay (South Africa) Ltd is applied here:

KEY

HIGH= Good progress/ ongoing high standards.

MEDIUM= Adequate progress.

LOW= Limited progress/ scope for improvement.

In the following tables below, the “Stated Commitments

for 2008” are the criteria used for rating Pick n Pay and

they have been adopted from JSE SRI document attached in

the appendix.

5.1. CORPORATE GOVERNANCE

5.1.1. CORPORATE GOVERNANCE- MANAGEMENT AND PERFORMANCE

STATED COMMITMENT

FOR 2008

WHAT IS DONE RATING

Processes and

Structures in

place for internal

auditing,

reporting and

review of business

operations and

management.

Weekly stock takings are done

to check targets and growth.

Internal checks are done and

reported to the manager and

directors by the Accountant.

HIGH

Internal reporting

processes and

structures and

review of Board

Managerial checklist is only

done by manager daily and he

reports findings to the

director but contingency plan

MEDIUM

8

and Management

performance in

place.

must be in place in case of

manager’s absence.

Identification and

management of

legislative

requirements,

risks and

opportunities.

Management addresses all

weaknesses identified by the

accountant or internal

auditor as well as

environmental auditors,

suppliers and the community.

MEDIUM

Measures taken to

eliminate

unethical and

corrupt practices.

Casual staff found being

unethical and doing corrupt

practices are faced with

disciplinary actions via

their employment agency and

the permanent staff: action

is handled by the Store’s

Labour representatives

(SEESA). It has instilled

discipline within the staff

as well as awareness and

created job opportunities for

others. Cases of shoplifting

are handled by the SAPS.

MEDIUM

9

5.2. ENVIRONMENTAL SUSTAINABILITY

The business is a medium-impact trading activity because

environmentally, it is other retailing business according

to JSE SRI Guidelines.

5.2.1. ENVIRONMENTAL SUSTAINABILITY- POLICY

STATED COMMITMENT

FOR 2008

WHAT IS DONE RATING

Demonstrated

commitment to set

objectives and

targets for

management of

direct

environmental

impact.

The store has the highest

rated score in Eastern Cape

with an average of always

above 95%. The audit by HACCP

is done once a month and they

are the government

recommended environmental

auditors.

HIGH

Demonstrated

commitment to

reduce or minimise

negative impact of

products and

services.

The indicators and facilities

that have direct impact on

the environment such as fire

hazards; energy (cooking and

heating; paraffin usage

(baking ovens), gas (deli

Burners) etc). And the

following are measures to

arrest or minimise the

impacts;

MEDIUM

10

1. Evaluation plan

2. SABS approved fire

equipment.

3. Trained staff to deal

with hazard.

4. Chevron tape for

demarcations in or

around affected area.

There are plans of actions

and procedures in place to

arrest these problems. No

need for the company to

panic and be at risk.

Demonstrated

commitment to the

use of management

systems and target

including

resource-

efficiency targets

appropriate to the

stores.

1. Availability of capital

budget for purchases of

equipments for

replacement.

2. Contingency plan and

allocated funds for

commitments.

3. For example, the store

purchased an automatic

generator as a back-up

facility as an

alternative to

electricity constraint

at the moment. This

LOW

11

enables them to make

maximum economic use of

their resources without

any waste.

4. Purchase of generator at

an amount of +/-

R750 000.00.

5. Contractual relationship

with National Head

Office on behalf of the

store to source and

supply certain produce

in bulk at volume

discounts from specified

producers and suppliers.

Demonstrated

commitment to

monitoring the use

of natural

resources and

development of

indicators to

assess progress

against recognised

standards.

Human Resource Development

Periodic Review of staff

performance and benchmarking

against targets. Compilation

and documentation of daily

readings of energy, water and

waste. Electronic monitoring

board to assess readings at

the generators sub-station.

HIGH

12

5.2.2. ENVIRONMENTAL SUSTAINABILITY - MANAGEMENT AND

PERFORMANCE.

STATED COMMITMENT

FOR 2008

WHAT IS DONE RATING

Demonstrated

rising of internal

awareness of the

company’s

significant direct

and indirect

impacts.

On induction, new employees

are made aware of the

store’s commitment the

environmental responsibility

as inherent and intrinsic

element function. Effective

communication such as

environmental fact sheets

and recognising major

environmental events. All

staff are trained and made

aware of the impacts of the

various indicators on the

environment such as adverse

consequences of misuse of

energy, water and

accumulation of waste to the

health of the clients, staff

and the products.

Installation of fire

extinguisher and blanket,

MEDIUM

13

danger sign at the specified

places. Potential sales of

contaminated product to

customers and consequences

are highlighted. Designation

of prohibited areas.

Demonstrated

management systems

which include

targets,

initiatives and

programmes

appropriate to the

business to

address and

monitor direct

impacts.

The store by government law

gets audited once a month by

a representative of health

organisation called HACCP

(FOOD STRATEGY

ORGANIZATION). The store has

never fallen below an

Average Standard Pass Rate

of 90% at any given time.

The manager’s wife (Maria

Cerini) heads up the Food

Strategy Checklist of the

entire store e.g. Service

departments, sales floor,

expiry dates of products,

checkouts, quality control

etc.

Categorisation of general

merchandise e.g. toiletries,

perishables, service

department, groceries, non-

HIGH

14

foods: TV, radios, batteries

etc; cigarettes, wine

(Alcoholic beverages), etc.

Sanitising equipment gets

supplied only by a

registered dealer who

supplies industrial cleaning

materials.

Temperature control

systems.

Refrigeration Usage.

Clean As You Go Strategy.

Gas Emission Mechanism.

Installation of huge

Generator at +/- R750 000 as

a back- up facility to the

current countrywide Eskom

power outages.

Receiving Air-lock System.

Noise Management System.

Use of diesel fuel.

Documented

management systems

including targets,

initiatives or

programmes

appropriate to the

Monthly HACCP evaluation.

External Pest Control

Evaluation fortnightly;

South African Bureau of

Statistics Inspection

(Scales, appliances, etc)

HIGH

15

business to

address and

monitor direct

impacts.

quarterly.

Evidence of

achievement of

targets or

continual

improvement, or

measures to move

towards this.

Auditor’s Reports (HACCP)

pass rate 95%+.

Targets in sales increasing.

Monthly Growth Targets

graphs (+25%).

Maintaining expenses

regularly (Buy-ins).

MEDIUM

Processes and

structures in

place for internal

auditing of

environmental

practices,

including remedial

action to review

and implement

results or

findings.

Internal Auditor or

Accountant who routinely

audits internal control

systems on environmental

issue, documenting them and

reviewing them with the

management or directors and

external auditors [(Chateris

and Barnes) East London and

Rosy Walker (Internal)].

MEDIUM

5.2.3. ENVIRONMENTAL SUSTAINABILITY- REPORTING AND

CONSULTATION.

STATED COMMITMENT WHAT IS DONE RATING

16

FOR 2008

Regular, clear and

comprehensive

disclosure of

environmental

sustainability

objectives

relevant to the

company including

performance

against

environmental

target.

Internal publications are

made of the environmental

objectives relevant to the

business. With time

environment changes due to

certain unknown events and

objectives are revised and

modified to suit a standard

business environment.

Regular disclosure of all

environmental objectives

against sanitation,

diseases, absolute health

standards (e.g. healthy

clothing and healthy body

etc.) against targets of the

company to owners/

directors, internal and

external accountants.

MEDIUM

Public disclosure

of quantitative,

comparable data on

major

environmental

issues relevant to

the company.

Media played a major role

during restructuring and

updating environmental

system in the business.

Media informing the public

of what was happening and

what was going to happen

HIGH

17

within the next two weeks.

Media was a powerful tool to

give to the public (national

resources) disclosure on

what was happening behind

the scenes.

Independent

verification by

suitably qualified

persons.

Written report sent to

chartered accountants

(Chateris and Barnes) East

London and environmental

auditors on monthly basis.

MEDIUM.

Disclosure of

major

environmental

violations or non-

compliance,

prosecution fines,

accidents.

Written reports to owners/

directors, management and

staff representatives

(Committees).

LOW

Stakeholder

Engagement.

Written reports to limited

persons i.e. owners/

directors, accountants and

management and suppliers but

not customers.

LOW

5.3. SOCIAL SUSTAINABILITY

5.3.1. SOCIAL SUSTAINABILITY- POLICY

18

STATED COMMITMENT

FOR 2008

WHAT IS DONE RATING

Demonstrated

commitment to set

objectives

relating to

employee

upliftment and

skills

development.

There are objectives for

career path development.

Employment of skilled and

unskilled employees training

and motivation policy.

Relevant position for

rightly skilled people.

MEDIUM

Demonstrated

commitment to set

objectives

relating to equal

opportunities

(including gender

equity), non-

discrimination and

empowerment such

as BEE and

Affirmative

procurement.

Upholding Employment Equity

Act.

Certain positions allocated

to gender equity e.g.

position of storekeeper is

not occupied by a female due

to masculine nature of the

functions.

Employment and maintenance

of more females than males

in the sales department.

MEDIUM

Demonstrated core

set of company

principles to

address the issues

The permanent staff has a

set of contracts of

employment and attached

thereto are the company’s

MEDIUM

19

set out in the

social pillars

such as labour

standards,

disciplinary,

corporate social

responsibility

undertakings etc.

rules and regulations which

have to be adhered to at all

times otherwise the relative

action will be taken e.g.

written warnings, verbal

counselling or disciplinary

hearings (hearings will be

handled by the SEESA).

Corporate social

responsibility – Funeral

Policy for permanent staff

paid by the business. Non-

contributory provident Fund

for employees, maternity

benefits. Sponsorship of

social events.

Demonstrated

commitment to

stakeholder

involvement on

social

sustainability

issues.

Complete stakeholder

involvement in social events

to raise awareness of health

issues such as HIV/ Aids;

Cancer, TB, public display

and education of staff,

suppliers and customers by

printing leaflets for

distribution bearing the

name of the store.

HIGH

20

Energy saving measures and

strategy such as power

pledge to economise

electricity. Energy saving

tit bits for the customers

and the public at large.

Demonstrated

objectives

relating to

employee

occupational

health and safety

including

HIV/AIDS.

Medical assistance to all

employees.

Emergency evacuation

procedure.

The National Occupational

Health and Safety Policy for

implementation is observed

by the stores and constant

reference to its written

document. Reduction or

curtailing HIV/AIDS pandemic

by 100% through counselling.

MEDIUM.

Demonstrated

commitment to

practices

recognising

importance of

partnerships in

implementing

corporate social

responsibility

Establishment of partnership

with Eastern Cape Department

of Health to access anti-

retroviral drugs to

employees.

Qualified first aiders and

staff representatives.

Policy of Support for

victims of diseases and

MEDIUM

21

strategies. injuries.

Demonstrated

commitment to

implementation of

corporate social

responsibility

strategies aligned

to business

strategy

reflecting ongoing

commitment from

business.

Strong partnership between

various businesses and

Pepper Grove Pick n Pay.

Association of Retail

Traders Forum. Partnership

with the Municipality.

MEDIUM.

5.3.2. SOCIAL SUSTAINABILITY –MANAGEMENT AND PERFORMANCE

STATED COMMITMENT

FOR 2008

WHAT IS DONE RATING

Documented

initiatives or

Manage the following social

performance indicators:

LOW

22

programmes to

address employee

health and safety,

including impact of

HIV/AIDS on

business

activities.

- Evidence of substantial

compliance with Labour

Department Guidelines for

Occupational Health

Management Systems;

- Number of work place deaths

per year.

- Existence of well-being

programmes to encourage

employees to adopt healthy

lifestyles.

- Percentage of employees

surveyed who agree that

their work place is safe

and comfortable.

Documented targets,

initiatives or

programmes to

address equal

opportunities

(including gender

equity).

Recruitment without

discrimination on the basis of

race, religion, gender etc.

Employment of HDSA people, the

composition of the staff

transcends all demographic

factors.

MEDIUM

Procedures /

systems in place

for stakeholder’s

engagement and

Complete stakeholder involvement

is social events to raise

awareness of health issues such

23

feedback. as HIV/AIDS, Cancer; TB, etc.

Procedures in place

to achieve

resolution of

disciplinary or

grievance issues.

Various disciplinary measures

such as hearings handled by

SEESA. Written warnings, verbal

counselling, and total

dismissal.

LOW

Evidence of

charitable

donations, active

community relations

as corporate social

responsibility

schemes.

There is a strong relationship

between the business and other

local business, e.g. pubs,

clubs, shops, etc. For example a

meeting was held at Rhodes

University with business owners

and organisations and Rhodes

Council to discuss and try to

address issues of student

alcoholism. The business licence

does not allow the business to

stock wine with an alcohol

content of more than 14%.

HIGH

6. THE CHALLENGES FACING PEPPER GROVE PICK N PAY.

The supermarket is a retailing business in the distributive

sector of the economy.

1. Competition

It can be seen that the business is operating in a harsh

business environment due to unhealthy competition. There are

24

equally other businesses and shops in the same industry and

the competitors such as Checkers Stores, Kwik Spar, Steers,

Debonairs are closer to it as well as Shoprite though a bit

further away but in the same geographic area. This places

tremendous pressure upon the business and the natural

tendency might be to trivialize environmental and social

issues and concentrate on the economic aspects in order to

increase bottom-line profit by increasing sales and cutting

costs.

2. Air Pollution

The business has a vast car parking area that can accumulate

more than two hundred vehicles at a time as well as other

businesses as it is sited in a Mall. The store is highly

exposed to air pollution such as the greenhouse gases (GHG)

and other hydrocarbons which pose health risks. In addition,

the business is involved in food processing and the

installation and use of a huge generator as well increases

the air pollution in the area.

3. Water from Municipality .

The substantial volumes of surface water used everyday in

food processing probably might be from within the local

environment although treated by the Water and Sewerage

Department. As at now, it cannot be ascertained that water

in transit has not been contaminated as the pipelines might

equally be punctured by metallic corrosion, abrasion and

rusting, though the water contamination is low but possible.

On inspection, there is no water storage system such as air

25

tight tank as a back-up facility in the event of water

supply disruption.

4. Food Safety

Organic foods including genetically modified food are on

sale and with the current project by the national office

called Organic Food Project; there is a risk and a resultant

loss if the food is eventually withdrawn from the market

though there is no proven scientific evidence to the

contrary. The fact that there is a food safety does not mean

the GM foods which are not processed and made under the

supervision of the food specialist is risk-free. Manual

processing of food has its own inherent risk.

5. Energy

As the energy crisis seems to have become a national issue

on account of electricity constraint and oil price which are

beyond the control of the business, the business has

purchased three huge automatic generators. However, the

electricity regulator has allowed the business to use only

one now and the generator seems to be a second-hand. This

brings into question the durability, serviceability and

energy–efficiency performance of generators.

7. PRACTICAL SUGGESTIONS TO SUSTAINABLE BUSINESS (PICK N PAY

GRAHAMSTOWN).

Sustainable Development.

- Demonstrate innovative sustainability development

actions.

26

- Source business needs from sustainable producers.

- Recycle.

- Eliminate waste e.g. offset carbon emissions (Carbon

Disclosure Project).

- Reduce energy consumption.

- Optimise resource use e.g. water.

- Employ minority groups- women, disabled, etc.

- Give back to the community.

- Ethical investing.

- Embrace 3BL reporting.

- Adopt a policy of strong sustainability.

- Marketing strategy should have environmental

sustainability and corporate social responsibility as

core objectives.

Carbon Footprint.

- Look for potential sources of CO2 and then estimate the

carbon footprint.

- Establish your boundaries for reporting process.

- Report it by equity ownership of the business.

- Describe what to report:

o Greenhouse gas inventory.

o Carbon footprint.

- Use air-cooling refrigeration system

- Install extractors of gases.

- Set up a Trust or Foundation to access tax incentives

e.g. Ray Ackerman Foundation.

27

- Create environmental initiatives such as “Green Bag”

sales at only a cost.

Reporting Considerations

- Ensure sustainability report is forward-looking.

- Concentrate on relevance in terms of business

sustainability.

- Engage stakeholders.

- Determine the specific indicators to be used to measure

performance: water, energy, waste.

- Define targets and timeframes for future performance.

- Offer report assurance.

Environmental Approach

The business is seriously concerned with environmental and

social issues as its theme is, “Without environment, there is no

profit and without profit, there is no social and community development”. The

business has shown a demonstrated commitment to

environmental, social and economic issues of its operations.

However, I advise the business to consider the following

measures:

1. The business leaders should think systematically and

realistically about the application of traditional

business principles to environmental problems. These

enable some businesses-- those with the right industry

structure, competitive position and managerial skills to

deliver increased value to shareholders while making

improvement in their environmental performance (Starkey

and Welford, 2005:53-54).

28

2. The business should create products or employ processes

that offer greater environmental benefits or impose

smaller environmental costs than those of its competitors

in Grahamstown. Such efforts may raise the business

costs, but they may also enable it to command higher

prices to capture additional market share or both

(Starkey and Welford, 2005: 54).

3. The business should consider Industrial Marketing: adding

value to its customers’ activities and then capture some

of the value itself. Lowering a customer’s environmental

costs adds value to its operations just as surely as a

new machine that enhances labour productivity does.

4. To undertake a successful environmental product

differentiation, the business must:

a. Identify customers who are willing to pay more for

an environmentally friendly product.

b. Communicate the product’s environmental benefits

credibly through leaflets, publications etc.

c. Protect it from imitators for long enough to profit

on its investment through branding and patent.

5. The business should view environmental quality as a

public good and note that people in Grahamstown are

willing to pay for public goods all the time considering

the demographic profile of the Municipality.

6. Develop a loyal base of high-income customers in

Grahamstown by ensuring that the brand identity of the

products and the business includes a commitment to

29

presentation (Starkey and Welford, 2005: 54). This seems

a food strategy because in Grahamstown the most

economically active and high-income earners are the

educated ones.

7. The business should treat environmental problems as part

of serious business issues and consider those problems

are matters of social responsibility (Starkey and

Welford, 2005: 55).

However, there are some common pitfalls in treating

environmental problems:

1. Business interests should not sway management opinion of

scientific and environmental analysis. Managers should not let

the costs of solving an environmental problem affect their

judgement of the scientific evidence that identifies the

problem (Starkey and Welford, 2005: 56). For example the

topical issue of genetic engineering products. Woolworths have

started removing them from their shelves while remaining ones

are clearly labelled (Starkey and Welford, 2005: 56).

2. The store should change things on their own without waiting

for bureaucratic blueprint from national Head Office.

3. Managers need to keep their minds open to the new

perspective and new facts that emanate from environmentalists,

governments (Departments of Environment and Tourism) etc

(Starkey and Welford, 2005: 57). This implies that management

and executives should bring to environmental decision-making

the same kind of optimisms, opportunities, analytical thinking

and openness that they instinctively bring to bear on other

30

business problems to benefit their business and the

environment (Starkey and Welford, 2005: 57).

4. The business should manage its competitors such as

Checkers, Kwik Spar and Shoprite by:

- working to change the rules of the game of business to

derive environmental and business profits.

- incurring higher costs to respond to environmental

pressure and develop or edge over its competitors by

forcing them to raise their costs even more. This can be

done by syndication, repositioning the business, punitive

government regulation etc (Starkey and Welford, 2005: 57).

5. Create a special initiative that appeals to the public with

environmental and social thrust and flair that create synergy.

Initiatives that enhance environmental reputation such as

Responsible Care Project to improve competitive position are

needed. This can lead to spending lower percentage of business

revenue to improve safety records, monitoring and compliance

costs (Starkey and Welford, 2005: 57).

6. If a company’s customers are willing to reward it for

improved environmental performance, the business will want to

forestall imitation by competitors. But if its customers

cannot be induced to pay a premium for an environmentally

preferable good, then it may want its competitors to have to

match to its behaviours (Starkey and Welford, 2005: 59).

7. The business should reconcile shareholder value with its

environmental management by focusing not on competitors but on

internal cost reductions. Cut costs and improve environmental

31

performance simultaneously and look for opportunities to

improve environmental performance (Starkey and Welford, 2005:

57).

8. Prudent environmental risk management is required. Buy

insurance against environment liability. Improve community

relations and achieve more stable long-term costs.

Environmental risk and environmental performance by management

should be made a factor in determining management incentive

pay. Integrate environmental risk management into overall risk

management approaches which will yield better decisions in the

long-run (Starkey and Welford, 2005: 60-62).

8. Develop research capabilities of new ways of product and

service delivery to customers such as home shopping, pension

payout etc, the staying power to impose business vision of the

future on the markets and resources to manage the inevitable

risks.

8. CONCLUSION

There are beneficial effects of corporate environmental

actions and an environmentally progressive reputation can

improve recruitment, employee morale, investors support,

acceptance by the host community and management’s self-respect

(Starkey and Welford, 2005: 326). Sustainable development is

quite essential in business successes and the corporate world

should embrace the principles of sustainability. The survival

and growth of businesses will be realised when the

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environmental and social implications of businesses are given

equal importance as the economic aspect.

Pick n Pay Grahamstown should adopt all its national corporate

policy on sustainability and also devise its own distinctive

ways of dealing with the three main pillars of sustainability

uniquely.

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9. REFERENCES

INSTITUTE OF DIRECTORS. 2001. King II Report on Corporate Governance of South Africa- Introduction. [Online] Available: WWW.IODSA.CO.ZA [ACCESSED 5 APRIL 2008].

JSE. 2000. JSE SRI INDEX - Background and Selection Criteria. [Online] Available: HTTP://WWW.JSE.CO.ZA/SRI/DOCS/CRITERIA/BACKGROUND%20AND%20CRITERIA.FINAL.06%2010%2003.PDF [Accessed 14 April 2008].

STARKEY, R., and WELFORD, R. The Earthscan Reader in Business and

Sustainable Development. Earthscan. London Sterling, VA.

WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT. 1999.

Definition of Sustainability Development. [Online] Available:

HTTP://WWW.WBCSD.CH/ABOUTDF.HTM[1/12/99] [Accessed 02 April

2008].

WORLD WIDE FUND FOR NATURE. 1999. Definition of Sustainability

Development. [Online] Available:

HTTP://PANDA.ORG/LIVINGPLANET/LPRREPORT.HTML[1/12/99]

[Accessed 02 April 2008]

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10. APPENDIX: JSE SRI

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