THE ENVIRONMENT

Environmental responsibility is a major factor in the operations of each Wesfarmers-owned business. They are required to develop, implement and report on compliance with environmental policies and procedures relevant to their circumstances. Legal compliance is a minimum with businesses encouraged to set higher standards.

Compliance with environmental regulations across the many jurisdictions in which the company’s businesses operate is monitored by the company’s Audit Committee. This occurs as part of the process of the Committee’s consideration of the annual stand-alone report covering all aspects of Wesfarmers’ sustainability-related outcomes, which has been produced since 1999. Previously entitled the Social Responsibility Report, in 2007 it has been renamed the Sustainability Report to underline the holistic approach taken by the company.Any material breaches of either environmental or safety standards are disclosed in detail in this report which is published each November. Copies are available from the Public Affairs department (+ 61 8) 9327 4251 or can be downloaded from the website at www.wesfarmers.com.au.

With increased public and political focus during the year on climate change, Wesfarmers has continued to develop its position on this complex and important issue. An external greenhouse risks and opportunities assessment was commissioned and this will provide the basis for future action. It follows an earlier study which was considered by the Board in 2003. The Board received an update on the company’s climate change responses at its planning session in May 2007.

Wesfarmers has for several years disclosed its greenhouse emissions through the sustainability reporting process and is well placed to meet government-imposed requirements to report emissions, expected to take effect in mid 2008. In addition, the company in 2007 was again a respondent to the Carbon Disclosure Project (CDP), providing information - which later is publicly released - on emissions and other aspects of climate change policies and responses. The CDP surveys major Australian and New Zealand corporations on behalf of a significant group of institutional investors with particular interest in this issue.

Wesfarmers also registered all of its businesses under the Commonwealth government’s Energy Efficiency Opportunities programme. This exceeded the legislative requirement on coverage of operational activity as this new compliance regime is seen as an opportunity for the company to make a contribution to a better environment and to reduce costs.

Bunnings increased its sustainability focus during the year with the announcement in May of new initiatives, costing $8 million, related to water use and climate change. All existing warehouse stores in sub-tropical mainland Australia will be fitted with rain water harvesting systems with that water being used to irrigate outdoor nurseries and to flush toilets. It also adopted a goal of achieving carbon neutrality by 2015 or earlier and will make grants to help develop carbon-offset projects.