J Sainsbury : Third Quarter Corporate Responsibility & Society Update

Our third quarter of the year has been extremely busy as we prepared for, and delivered, our busy Christmas trading period - with colleagues across our stores making a difference to provide a great Christmas shopping experience for our customers.

In addition to this, I am pleased with the progress we continue to make delivering our Sustainability Plan - focusing our efforts where we can really make a positive impact. Integral to this is our commitment to help our customers live healthier lives, and we are always looking for ways to fulfil our promise. One way we do this is by reducing salt and sugar across everyday products. We have reformulated our entire own brand cereal range reducing the average sugar content across the range by 13%. This exceeds the Government's target of a 5% reduction by the end of 2017. The entire range now falls below the maximum 2017 Public Health England salt target. We've also continued to reduce the sugar content of our own brand yoghurts and yoghurt drinks and, to date, have removed more than 37 tonnes across the range.

In November we hosted our seventh annual farming conference, themed 'Building a Distinctive Sainsbury's'. As ever it was great to see so many of our farmers and producers face-to-face, and I am pleased to report we had over 650 attendees present.

We also supported The Royal British Legion (RBL) and Poppyscotland once again this year by welcoming collectors into our stores across the country for the 2016 Poppy Appeal. So far this year, our support for RBL and Poppyscotland has exceeded £2.8 million.

During this quarter, I'm also pleased that, due to our ongoing support for Oxfam, we've been named as a member of the Oxfam Emergency Response Network. One recent example of the work we do in this area is the donation we made to support the relief work in Haiti following Hurricane Matthew.

Finally, as part of our Great Place to Work commitment and support for Diversity and Inclusion across our business, we launched our new 'Embrace the Difference' programme in October, inviting all of our colleagues to wear the badge to demonstrate their support for the commitment.

I look forward to updating you further on our Sustainability Plan progress in March 2017.

Mike Coupe, CEO

Other hightlights from the quarter include

1. Living healthier lives

Breakfast Cereal Reformulation: We have removed more than 452 tonnes of sugar, 18 tonnes of saturated fat and 11 tonnes of salt* from our own brand cereal range whilst increasing the overall grain content, as part of our commitment to help customers live healthier lives. As a result, our own brand cereal range now meets the 2017 Public Health England guidelines on salt and sugar reduction - with 100% of the range falling below the maximum. At the same time, the average sugar reduction across the range is 13%, exceeding the government's targets of a 5% reduction by the end of 2017. These reformulations were all validated by consumer panel taste tests - to ensure they were comparable to either the branded equivalent or the previous own brand product. The 80 reformulated own brand cereal lines went on shelf in November 2016.

*Based on volume of previous year's sales

Sugar Reduction in Yoghurts: We have continued our work to reduce the sugar content of our own brand yoghurts and yoghurt drinks and have now removed more than 37 tonnes of sugar across the range. Within our Taste the Difference yoghurt range, we've reduced the sugar content by 30,180kg - which takes the average sugar content from 15.0g/100g to 13.1g/100g, a reduction of 19.3%. In our bySainsbury's Greek Yoghurt with Honey, the average sugar content has reduced from 14.2g/100g to 13.4g/100g, a reduction of 5.8%, and our bySainsbury's fruit yoghurts have seen the average sugar content reduce from 14.1g/100g to 13.4g per 100g, a reduction of 5.1%.

Deliciously Freefrom Bread Range: To meet the growing customer demand for specialist 'free from' products (gluten, dairy and wheat-free), we have introduced a new range of six Deliciously Freefrom loaves, including white, brown and multi-seed sliced bread in both 400g small loaves and the slightly wider 535g sandwich loaf. To further support coeliacs, who can struggle to get enough fibre in their diet, the new Deliciously Freefrom breads have the highest fibre content per 100g in the market, beating both other supermarket own label ranges and Genius**. The Sainsbury's recipe also has the lowest sugar content on the market, at <0.5-0.7g per 100g, compared with Genius at 2.4-3.9g per 100g. Our seeded variant includes an exclusive five-seed blend of brown linseed, poppy seeds, quinoa, golden millet seeds and sunflower seeds.

**Compared to Tesco, Genius, Warburton's and Asda FreeFrom loaves

2. Sourcing with integrity

Sainsbury's Farming Conference - Driving Distinction: Our 7 annual Farming Conference, themed 'Building a Distinctive Sainsbury's', took place in November with over 650 attendees. The conference highlighted the areas where we are driving distinction including: facilitating 'intelligent agriculture' and increasing productivity by using data to help unlock insights; enabling our farmers' investment in quality and production and supporting animal welfare. We also announced our second scholarship programme at the conference: the Sainsbury's Farm Tech Scholarship aims to provide scholars with the opportunity to interact with experts, receive mentoring and share learnings from their own experiences.

Apprenticeships to Support the Next Generation of Farmers: This year, we formed a new partnership with Reaseheath College to deliver Sainsbury's Agriculture and Horticulture apprenticeship scheme. The new scheme will enable young apprentices to gain additional practical experience at Reaseheath College prior to entering the workforce. Twelve new apprentices have joined the scheme, and are currently undertaking a Level 2 Apprenticeship before going on to seek opportunities within our grower and farmer base.

Protecting the World's Fish Stocks: We're celebrating our four year anniversary of being the first supermarket to offer Marine Stewardship Council (MSC) labelled and certified canned skipjack tuna and have since sold more than 63 million cans of MSC labelled skipjack tuna. We remain committed to protecting the world's tuna stocks and have now added 19 MSC labelled and certified Sainsbury's products to our On The Go range, which takes us to a total of over 190 MSC labelled and certified Sainsbury's products across our whole product range.

3. Respect for our environment

Carbon Disclosure Policy success: Thanks to our on-going commitment to reduce operational carbon emissions, we were one of just three retailers worldwide to achieve the 'A' rating on this year's Carbon Disclosure Policy assessment.

Waste less, Save more: Following the success of a year-long trial in the South Derbyshire town of Swadlincote, we have announced the second phase of our Waste less, Save more campaign, designed to help cut household food waste. The months ahead will see us share our learnings from Swadlincote with communities across the UK. Over 130 'Discovery Communities' have now signed up, from Edinburgh to Truro, and these communities will be able to bid for Sainsbury's funding from a total of £1 million, to support the roll out of waste-saving initiatives.

Sustainable Clothing Action Plan: As members of the SCAP 2020 Commitment we are committed to reducing the environmental footprint of clothing. To help drive this, we're members of the Better Cotton Initiative, which supports the production and verification of sustainable cotton from our farmers. Thanks to this programme we've been able to save 7,377 tonnes of carbon and over 11 million cubic meters of water (more than 4,500 Olympic sized swimming pools) this year alone in the production of our non-food textile products.

Donating Surplus Food: We now have a total of 2,142 Food Donation Partnerships across our supermarkets and Sainsbury's Local stores, allowing us to share surplus food with local charities, ensuring it reaches those who need it most. Of these partnerships, 1,082 redistribute fresh, unsold food from across 955 of our stores. In addition to redistributing surplus food, we also have 1,060 food donation points across our stores, enabling our customers to donate food to support local causes.

4. Making a positive difference to our community

Joining Oxfam's Emergency Response Network: As a result of our ongoing support to Oxfam when natural disasters occur, we've been named as a member of the Oxfam Emergency Response Network. Last year alone, Oxfam responded to 31 emergencies around the world, providing life-saving assistance to nearly 9 million people, and our support is vital in helping them to respond quickly to save lives. One recent example of this is the donation we made to support the relief work in Haiti following Hurricane Matthew.

Supporting the Royal British Legion's Poppy Appeal: We supported The Royal British Legion (RBL) and Poppyscotland once again this year by welcoming collectors into our stores across the country for the 2016 Poppy Appeal. In addition we developed exclusive poppy merchandise, bags and floral displays with all profits given to the charities. For this year's appeal, we again offered poppies as part of our online delivery service, which continued to prove popular with our customers. Our colleagues replicated last year's support by banking poppy funds in store to ensure the safety and security of Poppy Appeal collectors. In addition, our colleagues took part in a range of volunteering opportunities including poppy planting at Westminster Abbey and a series of City Poppy Days across the UK. So far this year, our support for RBL and Poppyscotland has exceeded £2.8 million. As we look towards the year ahead, Sainsbury's is now the exclusive retailer of Royal British Legion poppy seeds to support their aim to increase the number of wild poppy fields in advance of the anniversary of the end of the First World War in 2018.

Receiving the Community Alcohol Partnership (CAP) Award: As 'Alcohol Awareness Week' began, our Retail Risk Manager, David Looker, was awarded the inaugural 'CAP National Champion' award to recognise the work he has done to support CAP across the UK. David's work has included advising on potential initiatives, arranging training and local support, and helping to establish new CAP partnerships. Sainsbury's has been involved since the first CAP was sent up in Cambridgeshire in 2007, and we are now working with around 30 individual schemes nationwide. As CAP goes from strength to strength, we look forward to playing an active role in schemes across the UK for many years to come.

Supporting Great Ormond Street Hospital (GOSH) with our Christmas campaign: All profits from sales of 'Gingerbread Dave', the star of our Christmas TV advertisement, and our 'Animation Film Kit' as well as customer donations in store, will be donated to GOSH to help fund accomodation for patients's families near the hospital during the Christmas period. Total sales and customer donations at checkouts helped to raise more than £500,000 for the charity.

5. A great place to work

Driving Diversity and Inclusion: In October this year, we launched internally our new 'Embrace the Difference' programme, inviting all of our colleagues to wear a badge to demonstrate their support for the commitment. We also added a new Diversity and Inclusion DVD into our colleague induction. Following the success of our first ever Black, Asian and Minority Ethnic (BAME) networking event in June, we've trialled five regional events in our South Zone and have further events planned for the New Year. November marked the one year anniversary of our female mentoring programme, which has seen almost 2,000 women from across Store Support Centres, retail and logistics paired with a mentor.

Engaging With Colleagues: In September, we carried out our second retail Talkback wave of 2016/17, with over 32,000 colleagues taking part in the survey. Overall, our retail colleague engagement score is 69% which is up one point from our last survey, demonstrating the commitment from our leadership teams to maintaining high levels of colleague engagement. We continue to score highly on key questions around colleague advocacy and trust, with 79% of colleagues telling us that Sainsbury's is a great place to work and 80% saying they trust us to do the right thing for them.

Taking Apprenticeships to the Next Level: We continue to support our colleagues to complete Craft Apprenticeships and currently have over 200 colleagues enrolled on Bakery, Fish and Café Hospitality programmes. We're also continuing to pilot Team Leader and Management Apprenticeships and have 119 retail and logistics colleagues due to complete the programme in 2017. The ten Software Developer Apprentices who joined us in September have been learning the fundamentals of coding and are now moving into their first placements.

Providing Colleague Benefits: Since December, colleagues have been able to use their discount cards at Argos and Habitat. Colleagues were excited by the news and we saw over 7,000 transactions at Argos from our colleagues in the first four days. We've also reduced the eligibility period for colleague discount from six months to three months to allow our colleagues to benefit more quickly.