Pepkor’s resilient business model continues to deliver growth despite challenging operating conditions.

The past financial year continued to present formidable obstacles to our progress, including high unemployment, power outages, economic slowdown and mounting financial pressures on consumers. At the same time, the economic environment has increased the demand for affordable solutions, bringing further alignment with Pepkor’s core purpose of making a positive difference in the lives of our customers.

The post-pandemic era has reshaped the global landscape. In the process, it has increased the importance of sustainability and ESG disclosure. Rising inequality, climate change and environmental degradation continue to put pressure on systems, both locally and across the world, posing risks that we might be increasingly unable to price into our thinking and decision-making. We believe that a focus on long-term sustainability serves not only to protect the value of our enterprise and our ability to serve our customers, it also helps us to amplify the positive societal impact of our efforts.
We see our sustainability focus as building resilience over time by strengthening the loyalty of customers, employees, communities and shareholders.

Highlights of the year

These key investment areas will remain a focus in the coming year: 

High levels of youth unemployment remain a major concern in South Africa. Employability is an important part of the solution and to this end we invested in 4 100 learnerships during the year.

Our Flash business digitised R37.1 billion cash and also obtained the right to distribute SASSA SRD (Social Relief Distress Fund) grants from June, increasing accessibility and paying out R134 million to beneficiaries.

The challenge of energy security and climate change is firmly in our targets and this year we invested R62 million in solar photovoltaic (PV) projects, taking the total installed capacity in the group to 6 MWp.

Our commitment to operational efficiency has resulted in further decreases in resource use, helping to maintain a low cost of doing business and enabling us to meet some of our environmental objectives. However, to be more ambitious about our sustainability initiatives, we have established our Building Better Business framework. This framework will help us to focus our sustainability efforts across the group by providing guidance on three key areas in which Pepkor companies can contribute collectively to scale our positive social and environmental impact. These include enabling affordable living for customers, fostering inclusive growth within and beyond our operations, and progressing along the road to greening our operations towards aligning with planetary limits.

Our sustainability team will be sharing this Building Better Business framework with all our operating businesses to help inform their decisions and find opportunities to scale our sustainability efforts. I am convinced of the alignment of this framework with our core business strategy, which aims to provide customers with affordable goods and services to serve their needs.

Pepkor has sustained its rich legacy of positive performance in serving a substantial portion of the informal market in South Africa. We provide essential platforms and channels that enable entrepreneurs and small businesses to participate in the economy and grow their businesses. We remain committed to supporting more local black-owned suppliers, aligning our efforts with the B-BBEE Codes of Good Practice and the Retail – Clothing, Textile, Footwear and Leather (R-CTFL) Master Plan.

This year we also focused on improving our ESG ratings with major rating agencies, including FTSE, ISS, MSCI and S&P, and I am pleased to report success in this regard.

We are proud to have once again met and exceeded the required threshold for inclusion in the FTSE/JSE Responsible Investment (RI) Index, the primary investor and rating scorecard we have tracked through the years. We also made our first submission to the CDP and continued with our TCFD roadmap. We welcomed the standardisation of global sustainability disclosure requirements from the International Sustainability Standards Board (ISSB), which will help us to navigate the complex reporting landscape, and have been actively engaging with the JSE Sustainability Disclosure Guidance to ensure our alignment with global best practices. We recognise that the local standards take the South African context into account, which will help us enhance the quality and nuance needed to mature our sustainability disclosure efforts.

It is a privilege to be part of this formidable group, which caters to millions of customers daily. Our unique position within communities and the South African environment enables us to make a substantial positive impact.

We are determined as a leadership team and employees to account in every decision and action we undertake to enable affordable living, foster inclusive growth and pave our road to green through Building Better Business together.

Pieter Erasmus
Chief executive officer