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INTEGRATED REPORT 2018

ENVIRONMENTAL MATERIAL MATTERS

Global warming and the visible impacts of climate change are becoming ever-increasing concerns for Spur Corporation. There is a notable paradigm shift worldwide relating to environmental sustainability and the way that businesses are dealing with pertinent sustainability concerns.

In 2018 a number of factors pointed to the importance of environmental sustainability. Globally, the biggest social conscience trend was a significant shift in awareness around plastic pollution. In South Africa, this global movement and the severe water shortages in the Western and Eastern Capes initiated consumer pressure across the group’s brands to tackle environmental issues.

Spur Corporation’s vision is built around the concept of a sustainable business and we are committed to sustainable environmental practices as a core aspect of our role as a responsible corporate citizen. Although our direct environmental impact is relatively small, the group monitors its use of energy and water, as well as waste produced, to reduce these responsibly. The environmental impact of franchisees and of the group’s supply chain is considerably bigger, and Spur Corporation uses its influence to promote positive environmental practices.

In 2019, our focus will be on:

  • Leadership engagement and capacity building to support strategic environmental sustainability requirements pertinent to the business.
  • Development of green building principals for new restaurant development and related gatekeeper engagement.
  • Supply chain engagement.
  • Review and update of the Environmental Legislation Toolkit.
  • Ongoing annual Green Ops Reports and Green Feather Rewards*.
  • Ongoing stakeholder engagement and training.

* Read more about these rewards in our integrated report here.

Operational and strategic resource management

Spur Corporation and its brand family would not have been able to grow as it has without a continual supply of inputs, such as meat, vegetables, fish, clean water, energy and building materials. The effects of global warming are becoming a major concern in the industry as extreme weather events, droughts, degradation of fishing resources and wildfires impact on food production, the availability of locally-sourced products and the increasing costs of manufacturing.

Red meat in particular is a significant contributor to global environmental concerns, such as climate change, pressure on water resources and deforestation for feed. Fish resources are under extreme pressure and we are continually challenged by availability of sustainable supply that also supports our financial model. We are faced with the reality of species decline as we witness the reduction of green-listed sustainable products. Water availability is becoming a desperate reality in South Africa, increasing production and resource costs and impacting franchisees’ profitability, which indirectly affects Spur Corporation’s bottom line.

Strategic response

Being a sustainable business requires full engagement, continuous training on and ongoing tracking and measurement of risks and targets. Environmental sustainability is overseen by the environmental sustainability committee (“ESC”), including the implementation of sustainability policies and the tracking, measurement and verification of environmental data streams. Progress is reported to the social, ethics and environmental sustainability committee and to the board.

The green operations assessment measures franchisees’ environmental performance and, together with the eco checklist, introduces environmental key performance indicators to enable monitoring and improve the understanding of the group’s total environmental impact. Modules covering environmental responsibility and awareness are included in Spur Training Academy courses provided to franchisee management and employees.

We are encouraged to see how resource efficiency promotes cost savings and we continue to engage with franchisees and employees on these issues.

Key sustainability highlights for 2018:

  • Plastic pollution: Packaging, especially single use items such as takeaway containers, plastic bags and plastic straws, provide a convenience to our customers. However, they also contribute to waste and landfill and environmental pollution if not managed properly. The group takes a proactive yet considered approach to plastic pollution. We are conducting a review of all single-use plastic items in all restaurants across our brands. The group participates in the #NoToPlasticStraws, #BanThePlasticBag and #OceansNotPlastic movements. Our packaging contains relevant information to educate and encourage customers to recycle or dispose of takeaway containers and related items in a responsible manner. Plastic straws in particular are not always necessary and cause pollution and physical harm to marine life. We have been working closely with our suppliers since early 2017 to introduce viable alternatives and are currently running trials with paper and other materials. We are further redesigning our operational processes to minimise wasteful behaviour by not automatically handing out a straw with every drink, with the view to phase out plastic straws completely by 2019 as the main objective. Three of the group’s brands already make use of paper bags and the remaining plastic bags are in the process of being phased out of Spur Steak Ranches and Panarottis Pizza Pasta restaurants. Consumers are also being given a choice as to whether or not they would like to use plastic straws. It is important to us that we ensure our customers, franchisees and suppliers are part of this process to ensure long-term buy-in and effect real change.

  • Responsible water consumption: Spur Corporation engaged with government and the City of Cape Town regarding the Western Cape water crisis to develop business continuity plans for our head office, production facilities and franchisees. The group also launched a “Water Savings” employee and consumer campaign and held workshops with franchisees around responsible water consumption.

  • The Ocean View Football Club Annual Environment Day:
    This annual Spur Corporation initiative is aimed at inspiring young volunteers to look after their environment, save water and appreciate marine life by contributing to the conservation of our oceans for generations to come. The theme for 2018 was “water-wise” and the day was hosted at the Soetwater Environmental Centre in Cape Town, in collaboration with the Two Oceans aquarium and Cape Town Water Conservation. https://youtu.be/SHf4kjvJKzs

  • Sustainability training: We continue to train new operations and franchisee employees on a variety of aspects around environmental sustainability. The group provides full access to all our resources in this regard on our Extranet and inTouch platforms.

  • Green Feather Rewards: Spur Corporation’s commitment to creating a sustainable business involves collaboration with our business partners, specifically our franchisees. The Spur Corporation “Green Feather Rewards” recognise franchisees for improvement in energy consumption, water conservation, waste management and eco procurement of non-centralised produce. The winners and runners-up receive additional financial support to further encourage their sustainability journey, a plaque of recognition to display in their restaurant, training, an eco intervention, social media artwork, the Green Feather icon on the brand’s website and marketing content for use on digital platforms and in the media.

  • Green operations reports: Six of the group’s brands reported on the green operations digital platform in 2018. Average participation reached 87% (2017: 88%) and the median score increased to 57% (2017: 48%).

Energy

While Spur Corporation’s offices do not consume significant amounts of electricity, various energy-saving initiatives have been implemented at group regional offices and facilities and consumption is closely monitored and reported on. There has been a notable decline in overall consumption measured year on year. The significant increase in the cost of electricity has sensitised franchisees to the financial benefits of sustainable environmental initiatives.

Most restaurants have converted to LED lighting and many use natural light whenever possible. However, there is still potential for implementation of these and other energy-efficiency measures to be rolled out, including motion sensors, timers and energy monitoring systems. More restaurants are investing in monitoring systems which is encouraging since it is proving to be the most effective method to manage energy consumption. The Durban and Johannesburg regional offices and the Cape Town head office building have energy monitoring systems installed.

Total electricity consumption measured through the energy monitoring systems for the past twelve months at corporate sites was 1 062 622 kWh (2017: 1 178 053 kWh). Regional office data showed a significant decline of 14% year on year to 580 133 kWh; (2017: 679 845 kWh). At our Cape Town head office, consumption per person decreased, but due to an increase in employee numbers, overall consumption increased to 343 351 kWh in 2018 (2017: 329 559 kWh). Regional corporate offices consumed 54% of the total electricity used by the group.

Water

Water use is tracked at the Cape Town and Johannesburg offices, at the Baker Street premises in Cape Town (décor manufacture, training centre and call centre) and at the sauce manufacturing facility.

Total water use across group premises decreased year on year to 7 300 kℓ (2017: 10 401 kℓ). Cape Town saw a significant decrease of 61% on the back of the “Water Savings” campaign and training initiatives year on year to 1 074 kℓ (2017: 2 788 kℓ). The sauce manufacturing facility uses most of the water consumed by the group, but saw a 26% decrease in water use during the period, using only 4 683 kℓ (2017: 6 313 kℓ).

While 66% of franchised restaurants report having employee awareness programmes in place to encourage water conservation, there is still considerable opportunity for franchisees to install water savings devices such as self-closing taps, aerators and water-efficient dishwashers.

Waste management

Formal waste reduction and recycling programmes have been implemented at the group’s corporate offices in Cape Town and Johannesburg, and at the Baker Street premises in Cape Town.

Overall, 72% of waste was diverted from landfill, compared to 71% in 2017.

The Cape Town offices currently divert 96% of their waste from landfill (2017: 94%), with 39% recycled and 57% composted. In total, 10 217 kg (2017: 12 850 kg) of waste was diverted from landfill and recycled during the year. There was a small reduction in the total amount of recycling and organic waste. This can be attributed to better procurement and less food wastage (40 tonnes of organic waste have been diverted from landfill since 2010).

The green operations reports show that most restaurants have recycling initiatives in place, although there is an opportunity to improve waste management.

Used cooking oil that is not disposed of in a responsible manner can clog drains, contaminate groundwater and affect plants and animals. The group pro-actively reports on oil usage and disposal and used oil collection data is included in the green operations reports. 444 restaurants participate in the spent oil collection programme, in which restaurants sell their spent oil to reputable oil recycling companies to ensure that it is removed from the food chain. Across the group, 30% (2017: 32%) of the spent palm oil blend used during the period was recycled, mostly through conversion to biodiesel.

Travel

The Environmental Committee continues to monitor and capture travel data to allow for input into the group’s biannual carbon footprint report. Total flights decreased by approximately 11% year on year, car hire increased by 43%, and accommodation bookings and bed nights increased by 16% year on year. Fuel purchased for the fleet of vehicles for operations managers across all brands was 236 009 ℓ (2017: 240 754 ℓ).

Greenhouse Gas (“GHG”) emissions

In 2017, an independent party was engaged to perform a carbon footprint assessment across the organisation’s head office, regional offices, production facilities and restaurants in Southern Africa. The assessment was based on the Greenhouse Gas Corporate Reporting Protocol as developed by the World Business Council for Sustainable Development and the World Resources Institute.

Inclusion of the GHG emissions into the ESC’s reporting structure enables Spur Corporation to analyse results and develop an internal GHG emission strategy and a programme to encourage the reduction in GHG emissions. This will be measured and reported on biannually, with the next measurement due in the 2020 financial year.

Procurement

Franchised restaurants in the Spur Corporation group purchase significant quantities of raw materials and we aim to ensure our suppliers share our commitment to sustainable practices. Sustainable supply is an important consideration given that changing weather patterns from climate change are projected to negatively affect food production over the medium term as global population growth increases demand.

Strategic response

Supplier assessments include green procurement and ethical sourcing considerations. Our outsourced logistics partner has an ISO 14001-aligned environmental management programme, and all three distribution hubs are fully ISO 14001 accredited.

The ESC will continue to work with the procurement team to fully unpack and explore the value chain to continue to develop resilience, reduce risk and identify new opportunities for growth. Through this ongoing focused approach the group aims to unlock green business value for the organisation in order to position our brands as prominent thought leaders and implementers of sustainable practices from farm-to-fork.

Sustainable seafood

The group, and particularly John Dory’s, faces a significant challenge in securing a reliable supply of seafood from sustainable sources. John Dory’s is committed to demonstrating the brand’s commitment to sustainability leadership with a specific focus on preservation of our oceans and the natural seafood resources, while proactively managing unexpected cost implications. John Dory’s set a commitment to source 100% of its seafood from Aquaculture Stewardship Council or Marine Stewardship Council certified sources, species that are on the WWF-SASSI Green List or from sources that are involved in a credible improvement project.

John Dory’s currently procures trawled hake from Namibia and uses it in various dishes on our menu. Although this hake is currently on the WWF-SASSI Orange-list and does not meet John Dory’s commitments to sustainable seafood, we are proactively engaged with the Namibian Hake Association and they have committed to MSC certification. John Dory’s believes that by staying engaged with this fishery beyond our seafood sustainability target date we can play a role in incentivising the fishery to continue to improve.

Spur Corporation’s procurement and sustainability team is currently working with WWF-SASSI to ensure that all seafood procured for the group meets this commitment.