Pick n Pay: Changing its Environmental Footprint

Abstract

Pick n Pay's initial steps to address environmental issues in the 1980s culminated in 2007 with the launch of its Sustainable Development Vision and Action Plan. Although the plan commits the organisation to a number of environmentally-friendly goals, a particular focus is on reducing carbon emissions. Pick n Pay has identified climate change, and the carbon emissions that are contributing to the global phenomenon, as presenting a risk not only to the business, but to broader sustainability as well. The plan commits the organisation to reducing its overall carbon footprint – and specifically its energy consumption – by 20% per square metre of trading space by 2012 (based on 2007 baseline figures).

At the same time, however, the company intends to increase its trading footprint by 12% a year over the same period. The biggest challenge for Tessa Chamberlain, general manager for sustainable development at Pick n Pay, lies in the conundrum of balancing these two goals. Can Pick n Pay achieve both, or will achieving one goal necessarily compromise the other?

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1 Green Protocols

The Montreal Protocol

The Montreal Protocol on Substances That Deplete the Ozone Layer is an international treaty designed to protect the ozone layer by phasing out the production of a number of substances believed to be responsible for ozone depletion. The treaty came into effect on 1 January 1989. Since then, it has undergone seven revisions, the latest being in 1999 in Beijing. It is believed that, if the international agreement is adhered to, the ozone layer will recover by 2050. Due to its widespread adoption and implementation, it has been hailed as an example of exceptional international cooperation, with Kofi Annan quoted as saying it is “perhaps the single most successful international agreement to date…” 1

The Long-Term Mitigation Scenarios

The South African government launched the process for developing long-term mitigation scenarios (LTMS) on climate change in 2006. In the scenarios, the government outlines a vision and adopts a “proactive and scientifically and economically robust policy framework” aimed at ensuring South Africa meets the challenges posed by climate change in the years to come. It has set the strategic direction for climate action in South Africa, and is expected to inform legislation on climate change in the future. 2

The LTMS process was coordinated by an inter-ministerial committee led by the Department of Environmental Affairs and Tourism. The scenarios were developed by a scenario-building team that included strategic thinkers from government, business and civil society, informed by four research teams. 3 The scenarios indicate that South Africa needs to reduce greenhouse gas emissions by between 30% and 40% from current levels by 2050. 4

The Stern Review

The Stern Review on the Economics of Climate Change is a 700-page report released on 30 October 2006 by economist Lord Stern of Brentford for the British government. 5 Its main conclusions are that the world needs to invest 1% of its GDP per annum to avoid the worst effects of climate change, and that failure to do so could reduce global GDP growth by up to 20%. Stern's report suggests that climate change threatens to be the greatest and most wide-ranging market failure ever seen. He states: “Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century.” In June 2008, Stern increased his estimate of required investment to 2% of GDP, to account for faster-than-expected climate change. 6

Notes

1. http://en.wikipedia.org/wiki/Montreal_Protocol (accessed 20 August 2008)

2. http://www.info.gov.za/speeches/2008/08072816451001.htm (accessed 20 August 2008)

3. http://www.polity.org.za/article.php?a_id=135193 (accessed 20 August 2008)

4. http://www.engineeringnews.co.za/article.php?a_id=137387 (accessed 20 August 2008)

5. http://en.wikipedia.org/wiki/Stern_Review (accessed 20 August 2008)

6. Ibid.

Exhibit 2 Pick n Pay's Sustainability Strategy

Figure

Exhibit 3 Pick ‘n Pay's Sustainability Performance Indicators

Figure

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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