Welcome to Wesfarmers’ 2009 Sustainability Report.

This document provides for our shareholders, and a much broader audience, a detailed and frank account of our performance across a range of issues that are of ever-increasing importance in helping form an assessment of what really makes a company tick.

I’ve said many times before, and it will always be the case, that long-term financial success is the prime objective of any corporation. But along with this goes the fair and decent treatment of employees (particularly in providing safe working environments), a high degree of sensitivity with respect to interaction with the natural environment and the use of resources such as water and energy, and a willingness to contribute to the communities on whose support companies depend.

Indeed, I maintain that financial success simply can’t be sustained without sincere, diligent and unceasing focus on corporate behavioural indicators, such as those mentioned above.

The structure of this year’s Sustainability Report is a little different to that of past reports, largely reflecting the significant changes that have occurred in our business in recent years. As with previous reports, however, ensuring that we are open and transparent about our business activities and their impacts remains our overriding consideration.

With origins dating back to 1914 as a Western Australian farmers’ cooperative, Wesfarmers has grown into one of Australia’s largest listed companies and employers. The diversity of our businesses – including retail; coal mining; energy; insurance; chemicals and fertilisers; and industrial and safety products – means we touch many communities every day, in a variety of ways. With this comes a responsibility to operate in a sustainable way and to take account of the interests and views of our stakeholders.

While our company has grown and evolved, we have tried to remain faithful to the fundamental principles that can be traced back to our very early days. Focusing on the effective management of our resources through the application of a disciplined business culture gives us the opportunity to improve performance and this, in turn, underpins the company’s sustainability.

Diversity also means that the issues we face are varied and wide-ranging and makes it imperative we get our sustainability objectives right. For the first time this year, we have identified five themes within which to describe our operations: people; carbon and energy; community contribution; net environmental footprint; and economic development.

In many of these areas we’ve improved. But the safety of our people is a non-negotiable priority and while there has been some progress, we simply have to do much better.

We’ve also done more in our approach to waste and recycling. This year Wesfarmers signed the National Packaging Covenant on behalf of all our relevant businesses instead of some of them having individual memberships or having been under the umbrella of the former Coles group of companies. The Covenant is a voluntary initiative by government and industry to reduce the environmental effects of packaging. All of our businesses, especially our retail operations, continue to make a significant financial and organisational effort to reduce, reuse and recycle waste.

Greenhouse emissions and energy efficiency remain a big focus for the whole Group. While those emissions were similar to 2007/08, despite growth across our businesses, this was largely as a result of the disruption to gas supplies following the explosion and fire at Varanus Island in Western Australia. This affected several of our industrial operations with significant production shortfalls leading in turn to reduced emissions. However, we are strongly committed to energy efficiency and all our operations continue to look for ways to improve. As part of this commitment we are implementing a new Group-wide information management system to assist in our energy efficiency objectives and with reporting our emissions and energy use to the Federal Government.

With such a wide geographic spread of businesses across Australia and New Zealand comes a responsibility to consider how we might do something in and for the very many communities in which we operate. One way we can make a difference is through financial and in-kind contributions. This year, I want to make special mention of the Victorian bushfires, a national disaster that directly and indirectly affected a huge number of Australians, including many of our employees. Nothing can ever compensate those directly caught up in this tragedy but we were able to make some contribution towards relieving the suffering. The financial help provided by our parent company, our businesses and our customers was significant – more than $12.5 million was donated to the Australian Red Cross Victorian Bushfire Appeal – and the response of our employees was outstanding. Some of them were right at the frontline of the disaster relief effort: Kleenheat team members provided vital advice for emergency services; Bunnings team members gave direct assistance to local Country Fire Authority and State Emergency Service crews and our retail stores donated goods directly into centres established near the worst-hit areas. Our insurance team members were on hand at emergency centres, fast-tracking client claims and assisting with enquiries. The case study later in this report goes into more detail but I want to take this opportunity to thank everyone from the company who contributed.

In conclusion, this is the twelfth year we’ve reported publicly on the sustainability issues and challenges faced by the company. Each year, we’ve strived to improve not only our performance, but the open and transparent way in which we give an account of our actions. We’re not perfect on either score but a lot of progress has been made. That’s due to the efforts of all our employees and, in particular, those most directly concerned with addressing these issues in the businesses we own.

As with previous reports, your feedback is important to us. A form has been included on the inside back cover and we’d love to hear from you. Alternatively, please contact us through our website www.wesfarmers.com.au

Richard Goyder Managing Director