Recently, Wesfarmers Managing Director Rob Scott spoke with the Australian Institute of Company Directors about Wesfarmers sustainability goals, shareholder returns and how WesCEF will play a significant role in its sustainable future.
By now, you’ll be aware of Wesfarmers ambitious net-zero target for all its Divisions to be carbon neutral by 2050. In his May interview, Rob talks about juggling the ambition to combat climate change with Wesfarmers primary objective to provide satisfactory shareholder returns.
“We don’t apologise for being very financially focused, but we believe strongly that to deliver top-quartile returns over the long term, you simply have to operate your business in a sustainable way,” he says.
Along with discussing the global challenges of moving away from fossil fuel and traditional manufacturing processes, Rob touches on the issues WesCEF face with currently limited technology.
“There is currently no technology commercially available to produce ammonia without emitting carbon. “You can’t offset it by moving to 100 per cent renewables because the process itself produces carbon. We’re optimistic there will be technical and commercial solutions for this, but it is probably going to be over the next decade and beyond,” Rob tells Deborah.
As well as challenges, Rob highlights opportunities for growth in sustainable markets, such as the WesCEF-led move into lithium – that involves developing a mine in Mt Holland and a concentrator and refinery in Kwinana.
Rob also touches on another important area of sustainability, Modern Slavery. Wesfarmers’ 2019–20 modern slavery statement identified 340 critical breaches across 105 suppliers. The majority of breaches included allegations of excessive overtime, transparency around recordkeeping and documentation, safety, unauthorised subcontracting and bribery.
“We shouldn’t pretend just because we are a developed Western economy that these issues [poor work practices] don’t exist in our country,” said Rob.
Wesfarmers has been reporting on sustainability since 1998 and using the Task Force on Climate-related Financial Disclosures (TCFD) to report on climate change since 2019. This year’s Sustainability Report will be released along with the Annual Report on 27 August.
Read Rob Scott’s full Australian Institute of Company Directors article here.