The CSR Steering Group consists of: Koen Slippens – Chairman of the Executive Board and Chairman of the CSR Steering Group Johan Pardoel – Food Retail Director Jeroen de Bree– Human Resources Director Kees de Rooij – Logistics Director Rob van Herpen – Purchasing Director Adrie Verlouw – Head of Building Services Ivan Huntjens – Head of Quality Services Wilco Jansen – Head of Internal and External Communications

The composition of the CSR Steering Group reflects the principal areas of CSR that we have defined for Sligro Food Group:

• Purchasing
• Energy
• Waste/environment
• Logistics and operations
• Staff
• Food safety

In June 2010, the CSR Steering Group made its choice of themes and set the priorities. The ‘spearhead projects’ described below have been given top priority and are the practical issues we have addressed first. Some are now at the implementation phase and others will be launched shortly. Firm and measurable targets will be set for all the spearhead projects by the end of 2010.

Affiliation to BSCI
In June 2010, Sligro Food Group joined BSCI, the Business Social Compliance Initiative, a non-profit organisation dedicated to setting clear rules and monitoring corporate social responsibility. All retail, brand, importing and trading companies affiliated to BSCI are committed to improving working conditions in their supply chain worldwide. BSCI’s Code of Conduct, which prescribes what is expected of suppliers, advocates a development-centred approach and can be further refined by the members if necessary. BSCI members undertake to embark on this improvement process in respect of two-thirds of their purchase volume or suppliers and will have their progress towards this target monitored by means of audits. The first audit will be carried out within 3½ years of the date when the member joined. At least one-third of the suppliers in ‘high-risk countries’ must achieve a satisfactory audit result after this initial period, rising to two-thirds after 5½ years. The audit checks that:

• freedom of association and the right to collective bargaining are respected
• no discrimination is practised
• child labour is prohibited
• legal minimum and/or industry standard wages are paid
• working hours are compliant with national laws and do not exceed 48 hours regular + 12 hours overtime
• there is no forced labour or disciplinary measures
• the workplace is safe and healthy
• the environment is respected
• there is a policy for social accountability
• there is an anti-bribery and anti-corruption policy.

Covered freezers in our supermarkets and cash-and-carry stores
Thorough research and testing to determine which type of cover for the island freezers in our supermarkets offers the optimum balance between energy-saving and customer access has shown that, in our EMTÉ supermarkets, horizontal sliding covers are the best solution. We have now started installing these covers and plan to have them fitted at all EMTÉ supermarkets by the end of 2011.
At our cash-and-carry stores, the optimum balance is achieved using another system. The lower ambient temperature in the space housing the island freezers in these stores compared with supermarkets and the larger (wholesale) pack volume demand a different solution. This takes the form of semi-enclosed island freezers with hot-gas defrosting. Tests with this system, which has been developed in conjunction with TNO, have shown that it delivers similar savings to those achieved in our supermarkets. We plan to equip at least 15 cash-and-carry stores with this system by the end of 2011.
Launch of video/teleconferencing
Our organisation has now attained a size and national coverage that makes it practical to use technology such as video and teleconferencing, which will reduce the time spent travelling to meetings and benefit labour productivity. By cutting the number of kilometres travelled on business, it will also reduce both our environmental footprint and our costs. We are testing this technology to gain experience. Implementation of new transport technologies
Several new technologies have come onto the market which either help to reduce the number of transport streams and hence the number of kilometres travelled and the related CO2 emissions or reduce noise nuisance. Sligro requires its transport operators to monitor the development of these technologies and adopt them where permitted. Examples include LZVs (Long Heavy Vehicles), which may be used on a small number of routes subject to the requisite official permits. Double-deckers that can carry over 80 rolling containers can be used for supermarkets. Our aim is to operate more LZVs out of the central distribution centre in Veghel and use more double-deckers for deliveries to the supermarkets. We are also committed to using PIEK-certified vehicles (PIEK is a nationally recognised quality mark for quiet vehicles). We trust that the government will take responsibility for expanding the number of routes on which LZVs can be used. Alternative engines and fuels
The automotive industry is developing increasingly ‘clean’ and more fuel-efficient engines. With several technologies already available, experimentation and development are continuing apace. Sligro wants to be involved in these developments and has set up various trials and pilot projects in association with its transport operators. We shall make our future policy choices on the basis of the outcome of these trials and the government’s strategic choices with regard to sustainability. Electric vehicles are already on the market, but are limited at present in terms of size and action radius. Truck engines can be modified to bifuel or dual fuel operation with LPG, natural gas or biogas. There are also trucks that can run exclusively on biogas. To gain experience with these technologies, we are preparing to conduct trials with:

• an electric truck at Sligro Delivery Service in Amsterdam;
• dual-fuel trucks at Sligro Delivery Service in Haps and the food retail distribution centre in Putten;
• a biogas-fuelled truck at Sligro Delivery Service in Haps;
• a truck powered by natural gas at the central distribution centre in Veghel.

Towards a sustainable primary sector
Sligro Food Group is not itself a primary-sector organisation, but it works closely with many suppliers of primary products and primary raw materials are used in the production processes operated by its Fresh Partners. Sligro therefore shares responsibility for the primary sector’s impact on people and on the environment in which they operate. The guiding principle is that a product should not harm the consumer or the environment. For example, if the product uses energy, it must do so efficiently. When a product reaches the end of its life, it must be possible to recycle its constituent materials to make other products. We are currently working on the following projects:

• promoting the use of sustainable soya;
• making the range of chocolate products more sustainable;
• promoting animal welfare, buying pork from uncastrated boars;
• supporting sustainable fishery;
• active participation in the Salt Taskforce;
• FSC certification for paper and wood.

Wherever possible, we conform to the Dutch Food Retail Association (CBL) sustainability calendar. Sligro Food Group is actively involved and participates in various steering groups.

Launch of Eerlijk & Heerlijk project
Sligro Food Group’s Eerlijk & Heerlijk range of sustainably produced items is built on four main pillars: organic, fair trade, sustainable and local. The objective is to offer the widest possible range of sustainable products. Eerlijk & Heerlijk represents socially responsible choices at product level. Every effort is also made to use the most sustainable packaging for Eerlijk & Heerlijk products. Eerlijk & Heerlijk is not a brand, but a concept that encompasses generally accepted independent quality marks such as EKO, Fairtrade/Max Havelaar, UTZ Rainforest and Rainforest Alliance.

Heat-recovery trial project
By switching to refrigerators and freezers using CO2 as the refrigerant at our larger (type 3–4) cash-and-carry stores, the heat recovered from the refrigeration equipment can be used to heat the building. We have embarked on a two-stage trial at our Sligro cash-and-carry store in Tilburg. The first phase will be completed at the end of 2010 and the second at the end of 2011.

Energy saving at frozen-food distribution centre
Energy consumption at our frozen-food distribution centres is a matter of particular concern, from the point of view of both environmental impact and energy use. As well as the standard of insulation, the refrigeration technology employed can also have a significant effect on energy consumption. There are a number of changes we can make to save energy. We are currently using indirect refrigeration systems at our two food retail distribution centres. By the end of 2011, these will be converted to direct systems, reducing energy consumption by 15%.

High-frequency lighting at distribution centres
We can save more energy at our distribution centres by installing a different type of lighting. In distribution centres of over 40,000 m2 we are installing high-frequency lighting which, combined with motion sensors and dimmers, can yield an energy saving of 20%. Installation will be completed by the end of 2011. Support of voluntary projects by Sligro Food Group staff Many Sligro Food Group staff are active in their private lives as volunteers assisting projects of social value, not simply as members of large charitable organisation, but in setting up or personally participating in voluntary projects, whether close to home or far away. We are keen to encourage and support these private initiatives and, to that end, we plan to create a support fund in 2011.

Each member of the new steering group has set up a working group to oversee implementation of the projects described above, but will still bear final responsibility for monitoring progress and reporting back to the CSR Steering Group. Ideally, members of the former CSR Committee will be included in the working groups as they have the specialised knowledge and experience of their individual areas and CSR.

Having published a number of annual reports on this subject, we increasingly feel that accounting for our performance in the broad-ranging field of sustainability does not by definition need to be linked to a calendar year. Sustainability projects are often for the longer term, extend over year-ends and do not have a financial year. We have therefore published this full report once more in 2010 and will in future publish more regular information on the progress of our activities in relatively short, easy-to-read printed texts and also on our corporate website www.sligrofoodgroup.nl. We shall continue to provide an annual CSR review in the future, in the form of a separate CSR chapter in our financial annual report, which is published in February. We value your opinion. If you have any comments or questions on our CSR activities or our social report, please e-mail us at this address: mvo@sligro.nl.