CCW CCW seminarseminar 8.10.20138.10.2013

– Anne Santamäki

12.9.2013 SOK

Th S G T dTh S G T dThe S Group TodayThe S Group Today1 St t f th S G 3 61. Structure of the S Group p. 3–62. Presentation of S Group’s business operations 3. the distinctive company form of the S Group 4. Responsibility in the S Group 5. .Responsible co-operation

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Structure of the S GroupStructure of the S GroupStructure of the S GroupStructure of the S Group

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Structure of the S GroupStructure of the S Group

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S Group in brief, 2012S Group in brief, 2012S Group in brief, 2012S Group in brief, 2012

S G o p is a Finnish ons me S Group is a Finnish consumer cooperative retail company group with diverse range of retail business.

S Group is cooperatively owned d b it t illiand run by its over two million

members (households).

S Group consists of 20 regional S Group consists of 20 regional cooperatives and the SOK Corporation, which is owned by th tithe cooperatives.

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Basic tasks and responsibilities of the regional Basic tasks and responsibilities of the regional p gp gcooperatives and the SOK Corporationcooperatives and the SOK Corporation

REGIONAL COOPERATIVES

SOK CORPORATION

Support services Providing services for members

Development and Providing benefits Development and strategic management

Providing benefits for members

Own business operations

Promoting the welfare of the local

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pregion

The S Group in figures, 2012The S Group in figures, 2012(2011 figures)(2011 figures)(2011 figures)(2011 figures)

Retail sales: EUR 12,037 million (11,461), ( , ) Profit before extraordinary items: EUR 212 million

(264) Bonus paid: EUR 379 million (360) Investments: EUR 573 million (546)( ) Outlets: 1,697 [in Finland 1,663] Employees: 43,417 people (41,568)p y , p p ( , )

S Group is the biggest food retailer in Finland, p gg ,market share is more than 45 %

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The history of SOKThe history of SOK

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S Group’s first 100 yearsp y

Poor services

Co-op more effective

Private stores more

Private stores

New meaning toservices,

supplyeffective

than private stores

stores more effective

than Co-op

storeslose their

direction

meaning to customer-ownership,New areas of growthof growth

1900 2000

New strategy,new structure

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new structure1983

Presentation of S Group’sPresentation of S Group’sb i tib i tibusiness operationsbusiness operations

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Business structureBusiness structureSS-- bankbank

S i t ti tS k t t d D t t dService station storesand fuel trade

Supermarket trade Department and speciality stores trade

Agricultural tradeAutomotive trade Tourism and hospitality Agricultural tradeand accessoriesTourism and hospitality

business

S Group’s car dealerships

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S Group’s car dealershipsOther S Group’s restaurants

The distinctive company formThe distinctive company formf th S Gf th S Gof the S Groupof the S Group

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Positive cycle of membershipPositive cycle of membership

Society

Member S Group

Own region

Units

M b hi

PartnersChains

Membership

Cooperative societies

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The S Group’s mission isThe S Group’s mission isThe S Group s mission is The S Group s mission is to provide services and to provide services and benefits to its membersbenefits to its membersbenefits to its members.benefits to its members.

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THE S GROUP’S VALUESTHE S GROUP’S VALUES

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Responsibility in the S GroupResponsibility in the S GroupResponsibility in the S Group Responsibility in the S Group

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The basis of responsibility principles The basis of responsibility principles

Values and co-operative business organisation model– Values and co-operative business organisation model– The minimum level is to obey the legislation, but the

target is to continuously improve our own operationstarget is to continuously improve our own operations– Responsibility is implemented in co-operation with other

stakeholder groups in the long value chain g p g– The perspective of responsibility is inherent in all the

choices and decisions made in the S Group – Corporate responsibility is the shared duty of all and a

part of normal day-to-day work

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Stakeholders expectationsStakeholders expectationsStakeholders expectationsStakeholders expectations

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Listening to stakeholdersListening to stakeholders

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Stakeholders expectationsStakeholders expectations Welfare through cooperative activities

Maintenance of cooperative enterprise ideology Benefits for members Benefits for members Ethical values

The personnel’s wellbeing and motivation Employment, occupation safety Equality, fairness Supervisor-employee relations

Responsible products and services Product information, origin Local food and procurement Local food and procurement Production chain Offering responsibly composed product range, communication

Resource efficiency Resource efficiency Material efficiency Waste management, recycling and re-use of waste E ffi i

20

Energy efficiency Renewable energy

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S Group Responsibility S Group Responsibility PProgramrogram

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Responsibility in S GroupResponsibility in S Group

The level of responsibility in S Group’s activitiesThe level of responsibility in S Group s activities exceeds legal requirements

Responsibility is based on S Group’s values andResponsibility is based on S Group s values and responsibility principles, ethical principles and the joint strategic goals set for responsibilityjoint strategic goals set for responsibility

Implementation of responsibility principles are part of normal business managementpart of normal business management

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Responsibility in S Group in the futureResponsibility in S Group in the futureResponsibility in S Group in the futureResponsibility in S Group in the future

The strategic goal in S Group is to be aThe strategic goal in S Group is to be a forerunner in responsibility

In 2012 we started to specify the measures In 2012 we started to specify the measures required in the different business areas in order to achieve this goal e gachieve this goal, e.g.Responsible Products and ServicesResource EfficiencyResource Efficiency

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SS--group responsibility programgroup responsibility program

S-group Forerunner in Responsibility

Resource EfficiencyResponsible Products and

Services

Products origin and

traceability

Monitoring supply chain social and environmental

impacts

Sustainableraw

materials

Energy useof outlets

EnergyEfficiency

Zero wasteto landfill

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Products origin and traceabilityProducts origin and traceability

Developing supply chain transparency and traceabilityp g pp y p y y

– Identifying risks– Transparent product information for consumers

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Transparent product information for consumers

Monitoring supply chain social and Monitoring supply chain social and i t l i ti t l i tenvironmental impactsenvironmental impacts

Developing production responsibilityDeveloping production responsibility

Social responsibility: > 90 % of the buying volume from risk countries BSCI or eq i lent diting p o eequivalent auditing process

Environmental responsibility: Business Environment Performance Initiative (BEPI) development and pilot test in Vietnam 2013

26

development and pilot test in Vietnam 2013

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BEPI

Sustainable raw materialsDeveloping raw materials sustainability

We define critical raw materials, sourcing guidelines and use of certification systems

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Resource Efficiency

Energy efficient lightning

Zero waste to landfill Energy use target for outlets

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The strategy and values of the SThe strategy and values of the S Group

The corporate responsibility principles

The responsibility program of the S Group

Operational plans by segments Grocery Hotels , Auto- Agri-ABCGrocery

Consumer goods

Hotels , restau-rants

Automotive

Agribusiness

ABC

Action programs of regional cooperatives and subsidiaries

29

Retail outlets

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Key activities and results 2012Key activities and results 2012

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Examples of sourcing policies

Only FSC-certified tropical wood acceptedReplacing palm oil when possible andReplacing palm oil when possible and

promoting the use of RSPO certified palm oil Ban of sand-blasting in textile manufacturingBan of sand blasting in textile manufacturing Responsible fish and seafood policy Labelling the origin of the productg g p

Social and environmental requirements are in the quality appendix of purchasing agreement

Requirements are equal to all suppliersO i t ti l h i t hOur international purchasing partners have an

important role of implementing requirements and audit process

31

and audit process

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Responsible Products and Services Sustainable Raw MaterialsSustainable Raw Materials

>2 200 Organic 69 FSC productsproducts

236 Fair Trade236 Fair Trade products

881 Swan Eco labelledproducts

63 MSC products

products

34 % of Palm Oil RSPO

35 Petrol Stationsselling E85

certified

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Energy Energy and Material Efficiency Figures, and Material Efficiency Figures, 20122012

Energy efficiency improved by 3,9 %

18 new wind power plants were built in 2012

Landfill waste decreased by 7 Landfill waste decreased by 7 %

Recycling, reuse and recovery rate was 85 %

Water consumption decreased by 13 6 %by 13,6 %

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ResponsibleResponsible coco--operationoperation

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S S Group’sGroup’s nationwidenationwide cooperationcooperation planplan, 2013, 2013pp pp pp

– Ice Skating Tour, winter 2012–2013Th Fi i h R d C– The Finnish Red Cross

– Mannerheim League for Child Welfare– Tangomarkkinat

P i J– Pori Jazz– Verkatehdas– Linnanmäki amusement park

M i ld– Moominworld– Sirkus Finlandia – Art Centre Salmela

Th F tb ll A i ti f Fi l d– The Football Association of Finland– Finnkino

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Principles of responsible cooperationPrinciples of responsible cooperation

– The goal is to support such activities (culture, sports and societal projects), which strengthen the emotional bond between co-opprojects), which strengthen the emotional bond between co op members and the S Group and which provide more benefits for co-op members.

– Part of the S Group’s corporate responsibility.

– Channelled towards activities which are in line with the S Group’s values.

– The aim is to find sponsorship deals which members can identify with.

– Partnerships should always offer clear benefits to members.

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Targets and sizes of responsible Targets and sizes of responsible titicooperationcooperation

The goal is to diversely support cultural and– The goal is to diversely support cultural and entertainment targets which interest co-op member groups.g p

– The focus in sports and exercise is on children and young people’s recreational activities.

– Societal projects support especially socially and societally responsible activities.Of the funds used approximately half are directed to– Of the funds used, approximately half are directed to sports, a quarter to culture and a quarter to societal projects.p j

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Growth of S Group’s grocery market Growth of S Group’s grocery market share 2012share 2012p g yp g y

382.9.2013 SOK * = Suomen Lähikauppa