Chairman on sustainability

Welcome message transcript from Michael Chaney AO Chairman, Wesfarmers

Hello everyone. Well, it's been a very busy year at Wesfarmers with the demerger of Coles and the sale of a number of our smaller businesses and entering into some new industries. And so the Group goes forward looking a little different to how it did last year.

It's also been a year in which there's been a lot of discussion publicly and in the press about issues like governance, about corporate culture, corporate responsibility and so on. I was intrigued to read recently that the Business Roundtable, which is America's peak business group, had come out with a change to its philosophy about the purpose of a corporation. Previously, they defined the purpose as providing returns to shareholders. But this year they've revised it to say that companies have a responsibility to all stakeholders, and 181 CEOs of big companies have signed up to a pledge saying that they'll look after the interests of all stakeholders.

Well, for anyone who's been following Wesfarmers over the years that couldn't have been a great revelation. I mean, for the last 35 years we've said in our annual report that while we have a corporate objective of providing satisfactory returns to shareholders, we can only do that if we look after the interests of all stakeholders. The interest of employees, the interest of customers, of suppliers, acting honestly and ethically in everything we do, looking after the environment and contributing to the communities in which we work and operate.

With regard to the last point, there have been two pretty interesting surveys released in the last year. The first was a survey by the Australian Stock Exchange of the top 50 companies ranked by the generosity that they demonstrate in community investment, by how much they give in dollars as a percentage of their profits.

And on that ranking, Wesfarmers is number one by a long shot, and contributes about four times the average of the top 50 companies. I don't think it's any coincidence that over the years we've outperformed in financial terms, and we've been a great corporate citizen. In fact if you invested in Wesfarmers 35 years ago, you would have done more than 10 times better than investing in the whole stock exchange.

The other interesting survey was conducted by Fortune magazine in America, in a survey they do annually called Doing Well by Doing Good. And in that survey Wesfarmers ranked 13 in the 50 companies, the top 50 companies in the world, and it was the only Australian company in the top 50.

So they're very significant survey results, I think, that demonstrate the sort of commitment that we have at Wesfarmers to being a good corporate citizen. You know if you're talking about corporate culture, it's those things, those values and beliefs, that define the corporate culture at Wesfarmers. I think we've got a lot to be proud of in that sense, but that doesn't mean that we can suffer from hubris and not think we can do better.

And that's why in this year's sustainability report you'll see some pretty ambitious targets for things like carbon emission reduction, employee safety statistics and so on. At the end of the day, sustainability for a company is about doing all of those things that I've described, right. That's why Wesfarmers, I believe, is a truly sustainable company. And if we continue to do them in the future we will maintain that sustainability.

Michael Chaney


August 2019

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