Environment and Sustainability

Waste and recycling

We have continued to work with our contractors, building managers and our people to improve recycling and reduce material going to landfill. This year, more than 4,200 tonnes of waste was diverted from landfill.

Further progress was made in the year on reducing the use of plastic in our distribution centres. This was achieved through initiatives designed to minimise wastage by changing the type of wrap plastic used, as well as from the introduction of an automated wrapping process in our Queensland distribution centre.

We continue to assist our retailers to reduce single use plastic across our IGA store network, particularly in the produce, deli and perishable sections. We also participate in the Australian Packaging Covenant’s Soft Plastic Working Group to collaborate with government and industry partners to reduce the use of soft plastics.

Emissions and energy reduction

A continued focus on initiatives to drive energy efficiency led to a 5.7% decline in the Group’s energy usage from 94,756 MWh in FY19 to 89,356 MWh in FY20. Total greenhouse gas emissions decreased 2.9% to 85,245 tonnes of CO2e.

Metcash exceeded its target of a 10% reduction in energy usage over the four years ended FY20 and has set a new target of a further 10% reduction in energy consumption by 2025.

Our distribution centres and warehouses are the largest users of energy across the Group and represent our greatest opportunity for further energy reduction. We are currently working with our landlords on the potential installation of solar panels in a number of our distribution centres which, if implemented, would reduce reliance on offsite electricity generation and further reduce greenhouse gas emissions.

Three of our larger distribution centres transitioned away from LPG-fuelled material handling equipment during the year to use all-electric models. This led to a decrease in pollutants and greenhouse gas emissions in these warehouses.

Climate change risks and opportunities

Metcash acknowledges that the increasing volatility of weather events can present risks and opportunities to our business. To better understand climate change risk for Metcash, an assessment of both the perceived physical and transitional risks and opportunities was undertaken.

The key physical driver of climate change risk for Metcash was found to be an increase in the frequency and severity of acute climate change events such as bushfires, drought, floods, extreme storms and cyclones. The assessment concluded that the highest risk associated with these events is likely to be an increase in insurance premiums. Lower level risks included:

The major physical opportunity is expected to be an increase in demand for certain product categories such as water, water
storage, long life groceries, generators, masks and fire protection equipment.

The assessment found there were medium level transitional risks for Metcash including potential reputational damage should the Company not meet stakeholder expectations on climate risk disclosure, and additional compliance costs should government introduce new greenhouse gas emission regulations or laws.

The Company continues to assess climate change risk and opportunities and plans to expand its disclosure in FY21. This will
include reviewing our current climate related management practices and disclosures against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and peer disclosures, with further improvements being made as appropriate.