Gung Ho! Pizza Sustainability Report 2013 Gung Ho! Pizza Tel +86 010-5135-8557 Shop 2 / Hairun Int'l Apartments Cnr Jiangtai Rd & Fangyuan W Rd Beijing, China http://www.gunghopizza.com johnandjade@gunghopizza.com Table of Contents Contents Welcome ___________________________________________________________________ 1 Gung Ho! Pizza’s first Sustainability Report, 2013 _________________________________ 1 Gung Ho! Pizza ______________________________________________________________ 2 From the Co-Founders ______________________________________________________ 2 Company Culture ___________________________________________________________ 3 Company Vision ___________________________________________________________ 4 Change People’s Lives ____________________________________________________ 4 What does the name ‘Gung Ho’ mean?________________________________________ 4 Our Leadership ____________________________________________________________ 5 Board of Directors ________________________________________________________ 5 Senior Management_______________________________________________________ 5 Stakeholder Engagement ______________________________________________________ 6 Gung Ho! Pizza Stakeholders _______________________________________________ 6 Profit ______________________________________________________________________ 7 Profit ______________________________________________________________________ 8 Food Safety _______________________________________________________________ 9 Customer Satisfaction _______________________________________________________ 9 Community_______________________________________________________________ 10 Support the environment __________________________________________________ 11 Share management experience with NGOs ___________________________________ 14 Supplier Relationships ______________________________________________________ 14 People ____________________________________________________________________ 15 People ____________________________________________________________________ 16 Occupational Health and Safety ______________________________________________ 16 Training and Development __________________________________________________ 18 Diversity and Equality ______________________________________________________ 20 Family __________________________________________________________________ 20 Gung Ho! Kindergarten: ___________________________________________________ 21 Maternity and Paternity Leave ______________________________________________ 21 Table of Contents Planet ____________________________________________________________________ 22 Planet ____________________________________________________________________ 23 Waste___________________________________________________________________ 24 Waste Management ______________________________________________________ 24 Waste Reduction ________________________________________________________ 25 Energy __________________________________________________________________ 26 Packaging _______________________________________________________________ 27 Paper packaging: ________________________________________________________ 27 Plastic packaging: _______________________________________________________ 27 Reusable packaging: _____________________________________________________ 28 Packaging upcycle _______________________________________________________ 28 Emission ________________________________________________________________ 29 Sustainable Building Materials _______________________________________________ 29 Environment Training ______________________________________________________ 30 Contact Information __________________________________________________________ 32 Company Information ________________________________________________________ 32 Global Reporting Initiative _____________________________________________________ 33 G4 Content Index, GRI in accordance option – Core ______________________________ 33 Welcome Pg. 01 The Triple Bottom Line seeks to truly measure a company’s impact on the world with three simple metrics. Economic, Social & Environmental. Profit. People. Planet. Welcome Gung Ho! Pizza’s first Sustainability Report, 2013 Gung Ho! Pizza joined the scene in July 2010 as a brand new Beijing-based startup by young Kiwi’s Jade Gray and John O’Loghlen. Leveraging a collective 17 years of experience in the Chinese F&B industry, Gung Ho! represents a new approach to local entrepreneurship; rooted in the community, responsible to its team and customers, and proudly made in China. Here at Gung Ho!, we aim to build a sustainable business model that follows the concept of the triple bottom line: Profit, People, Planet. We’re not just about selling great pizza or focusing solely on profit and growth, instead our greatest aim is to change people’s lives. We care about the community and our environment. We recognize the impact that environmental changes are having on our industry as well as our industry’s impact on our environment. That is precisely the reason we are currently developing a comprehensive sustainability plan. Of course, we’re just getting started, and we recognize a tremendous opportunity for improvement, but this is a long term journey. As the famous Chinese philosopher Laozi said, “The journey of a thousand miles begins with the first step.” We look forward to the challenge and hope our experiences in learning to be a sustainable business can help the restaurant industry and others take the first steps toward a brighter future for everyone. Gung Ho! Pizza Pg. 02 Gung Ho! Pizza From the Co-Founders “If development turns healthy people into unhealthy people, then this is a parody of development” These are the words of Zhou Shengxian, The Environmental Minister for the People’s Republic of China. I have yet to hear a more insightful comment from the Communist Party on the state of the environment here in China. My own interest into the relationship between economic development and the environment began on my 10th birthday, when my father gave me a book on Greenpeace’s efforts to protect the natural habitat of the Antarctic. The stunning photos of Blue Whales and emerald icebergs captivated my imagination, yet at the same time raised my awareness to the dangers of man’s encroachment upon its wilderness. As I entered the business world, I was conflicted with the knowledge that economic development was the cause of much of the world’s environmental degradation. Putting off my urge to fight that system with activism, I decided to commit to developing a business model in China that could help create a solution to the problem rather than contribute to the cause. Fast forward 15yrs and I meet John O’Loghlen, a man on a similar mission. Sharing a passion for China, pizza and sustainable development, we launched Gung Ho! Pizza with the mission of becoming “The Patagonia of Pizza”, emulating the ethos of Yvon Chouinard’s iconic Patagonia apparel brand. In the 4yrs that have followed many have joined our journey in building a sustainably conscious enterprise, one that adheres to the “triple bottom line” philosophy. In the following report you will learn of our successes and failures in our effort to become a more responsible company. It is our hope that by sharing Gung Ho’s efforts to date we can continue to engage the support of our stakeholders, and even inspire some others to follow a similar path in their own enterprise here in the Middle Kingdom. Yours in all things Gung Ho, Jade Gray and John O’Loghlen (Add a pic of Jade and John) Gung Ho! Pizza Pg. 03 Company Culture In a 1995 article entitled “Building Companies to Last,” author Jim Collins wrote that “architects of visionary companies don’t just trust in good intentions or “values statements;” they build cultlike cultures around their core ideologies.” At Gung Ho! Pizza, we believe that a company’s culture is akin to its soul, and it’s reflected in each and every member of our team – without whom none of this would be possible. Our guys & girls give it their all – day in and day out! They aren’t afraid to speak their mind, but they also aren’t afraid to get involved and be a part of the solution. They take care of business and each other with a smile on their faces. That’s the Gung Ho! way. The core values to which we align our team members reflect the impact we would like to have on the world. We believe in taking care of Gung Ho! people, and in today’s increasingly connected world it means we must look to our impact beyond what is plainly visible and look to how we can take care of our future Gung Ho! family and think global while acting local. (Change to nice company culture format.) Gung Ho! Pizza Pg. 04 “Gung Ho! It means: Work Together” Company Vision Change People’s Lives From the delivery guy bringing a smile, the customer service girl remembering a name, or a great tasty pizza that hits the spot, we like to think we’re changing our customer’s lives a little bit for the better. But we try to do way more than that. We teach our team life skills like personal finance and goal attainment, we send them to school to learn new skills and gain accreditations in areas like cuisine, accounting, and human resources. We teach our young leaders the latest bleeding edge global management techniques like those laid out in books like Mastering the Rockefeller Habits, Good to Great and TopGrading. When a member of our team has family problems we’ll help them out and when they’re sick we’ll take them to the hospital. And if they rock it hard enough, for long enough, we make them partners. We also try to focus on helping our planet by following our sustainability plan in order to do everything we can to reduce our environment impact. These include reducing & recycling our waste, reducing our energy usage, changing our packaging, giving our team members environmental training, and building greener stores. What does the name ‘Gung Ho’ mean? Rewi Alley came to China on April 21, 1927. During the Japanese invasion of China in 1937, he was involved in efforts to found the Association of Chinese Industrial Cooperatives (Gōng Yè Hé Zuò Shè), commonly known by the slogan Alley coined, ‘Gung Ho/Work Together’. (Rewi Alley - The Original Gung Ho! Guy, a Kiwi [New Zealander].) “The term was picked up by United States Marine Corps Major Evans Carlson from his New Zealand friend, Rewi Alley, one of the founders of the Chinese Industrial Cooperatives. Carlson explained in a 1943 interview: “I was trying to build up the same sort of working spirit I had seen in China where all the soldiers dedicated themselves to one idea and worked together to put that idea over. I told the boys about it again and again. I told them of the motto of the Chinese Cooperatives, Gung Ho. It means Work Together-Work in Harmony…” Gung Ho! Pizza Pg. 05 Gung Ho aimed to organize small-scale self-supporting cooperatives which created employment for workers, while continuing production to support resistance against the Japanese. As part of the Gung Ho movement Alley dreamed of training young Chinese in the skills that the cooperatives needed. It is in that spirit that we use Gung Ho! today, the spirit of our culture of learning and development, working together in harmony for a brighter future. Our Leadership Board of Directors Gung Ho! Pizza’s Board of Directors uphold their duties, following both the corporate laws of Hong Kong S.A.R. and the corporate laws of the People’s Republic of China as they relate to governing Wholly Owned Foreign Enterprises. In doing so, Gung Ho! Pizza files annual tax and accounting filings, as well as fulfilling our legal obligations according to the laws of these two jurisdictions. The Board of Directors manages the company through many leading edge management practices. Goal setting is structured into series of 5, 3 and 1 year strategic plans that are broken down by division on a quarterly basis and make up the overall appraisal system for the business. Senior Management Gung Ho!! Pizza implements long term strategy through our senior management team using weekly, monthly and quarterly meetings. Senior managers are responsible for departments of Finance, Marketing, Human Resources, Operation, Product Management, Business Development, Purchasing and Environmental Protection. It is our company philosophy to consider all three bottom lines (Profit, People and Planet) in determining decisions. Stakeholder Engagement Pg. 06 Stakeholder Engagement Add content: the basis for identification and selection of stakeholders with whom to engage Gung Ho! Pizza Stakeholders Stakeholders Stakeholder engagement Team members Regular management communication Regular team training Company culture audit survey “Top grading” performance assessment Customer Regular customer survey Customer communication channel: email, phone, Weibo, Dianping.com Customer interaction activities Customer complaining management Suppliers Regular supplier communication Yearly Gung Ho! supplier conference One on One communication when there is problem Media Regular newsletter to media Government Follow government regulation Submit tax report Regular communication Investor Regular report to investors Regular communication Landlord & Regular communication property manager Family, Friends Gung Ho! kinder garden Gung Ho! friends party Community Charity activity Profit Pg. 07 Profit (blank section title page) Profit Pg. 08 The economic pillar of the Triple Bottom Line philosophy is simplified as profit. Differing from the traditional accounting definition of profit, it instead measures the economic value of an operation after deducting the cost of all inputs. The idea is to truly measure the economic impact an organization has on society rather than simply on its own PNL. Profit Gung Ho! Pizza is a privately owned, limited liability company, headquartered in Beijing, China. Established in 2010, we now have 4 stores in Beijing. Our objective is to be the best pizza delivery chain in China. We didn’t accept that food delivery needed to be inferior so we decided to change the game and create a company that delivers gourmet cuisine. Gung Ho! Pizza provides authentic, nutritious, safe food – delivered with fast, intimate service. (Gung Ho! Pizza's Gourmet Offerings) Profit Pg. 09 Food Safety As a provider of gourmet cuisine, we take food safety as our number one priority. Before we even opened, our founders traveled around the world to find the best-tasting, healthy, gourmet pizza, and John travelled to learn the art of pizza making in one of the oldest and most prestigious pizza schools in Italy. To ensure safety across the whole life cycle of our food, we source all of our ingredients from responsible and long-term cooperative suppliers, and ensure all our ingredients are well received by our central kitchen, prior to delivery to all of our stores by cold storage truck; we give daily training to our team members on each of our food safety systems, as well as perform regular spot checks to ensure they follow each and every step. We never produce or sell any product that has been banned in the markets, nor do we sell or stock items of increased risk, for example produce from regions with unsafe water tables, poultry from areas suspected of avian flu, or dairy products from companies with unsafe records. We make sure we follow safety requirement and actively communicate with our customer whenever food safety concerns may arise. Our food safety complaint target is <1.5 per store, per quarter. In 2013, we averaged 2.16 complaints per store per quarter. (Change to infographic) Quarter Food safety complaint average per store 1 2.33 2 3.98 3 1.49 4 0.85 Yearly average vs target 2.16 vs 1.5 Customer Satisfaction We value every customer’s feedback and every action we take is in effort to improve the customer experience. We have daily customer surveys in each store, we monitor our Dianping.com score daily, and we call every customer who has lodged a complaint in order to try and directly solve their issues. In 2013, our Net Promoter Score was 90.67% (measured by daily customer surveys). Profit Pg. 10 In order to achieve optimal customer satisfaction, beyond our great-tasting, healthy, gourmet pizza, we also aim to provide fast, intimate service to our customer. By end-of-year 2013, our average Dianping.com scores: (Change to infographic) Store Taste Environment Service Lido 8.7 8.4 9.1 Sanlitun 8.3 7.7 8.9 Shuangjing 8.8 8.7 9.3 Company average 8.6 8.3 9.1 (As a new store, data from Wangjing is not included.) Community Based in Beijing, we have strong connection with the local community, beyond keeping their bellies full. We also support our local community in various ways. Charity Support Programs Chi Fan for Charity Chi Fan for Charity is an annual event that invites restaurants from all over Beijing to host (Nov, 2013, Chi Fan for Charity supported by Gung Ho! Pizza along with Plastered 8 T-Shirts and Great Leap Brewery: 500,000rmb raised.) limited seat dinner parties, the proceeds of which go to local charities. Every November for the past 3 years Gung Ho! Pizza has leapt at the chance to get involved with Chi Fan for Charity. Beijing United Family Hospital fair In Dec, 2013, we joined the Christmas tree lighting & family fair organized by United Family hospital. We donated our product for auction to support disabled children. Suggest a better picture or pic of Beijing Family United Hospital Profit Pg. 11 Support the environment Roots & Shoots The Roots & Shoots program is about making positive change happen – for our people, for animals, and for the environment. In Nov, 2012, Jade & John had a private dinner with founder of Roots & Shoots, Dr. Jane Goodall, the renowned primatologist, environmentalist, and humanitarian. In Oct, 2013, Gung Ho! Pizza joined the Roots & Shoots Summit – “I have a Dream”, all food sales for the event were donated to the Roots & Shoots environmental program. Jade Gray and John O’Loghlen with environmental activist and personal hero Jane Goodall Gung Ho! Pizza supports Roots & Shoots Summit “I have a Dream” Profit Pg. 12 A green world for children In Feb, 2013, organized by the environmental NGO Friend of Nature, Gung Ho! Pizza members came to the Little Swan school for the children of migrant workers, where we planted a garden for the school, bringing green to the children. Profit Pg. 13 In June, 2013, Laura went to the Beanstalk school to give children training about “Reduce, reuse and recycle”. In Oct, 2013, invited by the school's sustainable development program teacher, Gung Ho's green team went to Beijing Normal University to share our journey to build a green restaurant! In Dec, 2013, together with 829 basketball team, we came to a local school in Hongshan, where we played basketball with children, ate gourmet pizza together, and Laura gave training about air pollution! Profit Pg. 14 Share management experience with NGOs Beginning in 2013, Gung Ho! Pizza has assisted various animal shelter programs in Beijing. Our impact to date includes sponsoring a full time employee at an animal shelter, donations to set up a web site for Beijing Adoption Day, and management training for their volunteers. Supplier Relationships We work closely with our suppliers, keeping regular communication to ensure smooth cooperation. Taking care of Gung Ho! people extends beyond the members of our team or the customers we work so hard to serve. We also count our suppliers as a part of our Gung Ho! family. For our suppliers, we look for long term cooperation and work to support each other. We have very high standards, especially for food safety, so we help our suppliers to understand and reach our standard. These standards have been clearly communicated regularly and through supplier conferences. (Checking the temperature of vegetables from a supplier) People Pg. 15 People (blank section title page) People Pg. 16 The social pillar of the Triple Bottom Line philosophy is simplified as people. It seeks to measure a company’s impact on the social environment. In an ideal TBL company, all stakeholders benefit from a reciprocal social structure, be they employees, investors, our customers, or our local community. People At Gung Ho! Pizza, we hire 97.7% of our staff locally in China. We provide training, development opportunities, and other unique benefits to the members of our team. We believe that once we have happy employees, we’ll have happy customers. We have high standard for hiring that puts a great deal of emphasis on a team member’s fit to the company culture, since we believe skills can be trained and developed but it’s near impossible to change the character of a person. In order to find the best Gung Ho! people for the best roles, we use the “Topgrading” system developed by Bradford Smart, as our chosen method Thomas holds beers with his photo on them - the prize for top performers! of conducting all our interviews. Together with our training and evaluation systems, our team members not only get a good job with a growing company, they get the opportunity to understand their strengths and weaknesses, and develop themselves. For long term employees, we offer stock options, making them partners in the company where they can share in the future success and growth of the company that they’ve helped to create. Occupational Health and Safety We say it often and we take it serious when talk about the company culture value “take care of Gung Ho! people.” For our team members, we take their health and safety as our first priority. In 2013, we had 6 injuries during work in total. All injuries were mild bodily injuries. 4 of the incidences occurred during pizza deliveries, 1 injury during training, and 1 injury while handling materials. Based on the risk analysis, we identified those few fields where we should pay the greatest attention. The highest injury risk lies in potential traffic incidents when our pizza delivery team are performing their jobs. With due diligence to prevent future injuries, we provide specific People Pg. 17 training to ensure every member of our team understands how they should protect themselves from injury. For example, first aid, transportation safety, air pollution, and fire training. In addition to safety training, we also provide proper safety equipment: • Air purification systems • Safety Helmets • High-quality, well-maintained, electric bicycles • Anti-pollution, particulate respirator masks • Full complement of safety pads and weather appropriate gear Gung Ho! ambassador Bruce, wearing his anti-pollution, airmask. People Pg. 18 Training and Development Many of our team members are young and from rural areas, where they may have less access to education, face difficult futures, or must overcome harsh poverty. But they all come to Beijing armed with their dreams and a desire to learn and grow. They hope to create a better living conditions for their families through their hard work, they hope to develop more prosperous futures for themselves, and they dream of a brighter tomorrow. At Gung Ho! we respect everyone with dreams for the future. One of Gung Ho!’s company culture values is to “Develop yourself.” We encourange each and every one of our valuable team members to develop themselves, by providing various training and opportunities. Every year, we provide hundreds of hours of training to our staff members: (Change to infographic or nice form) Position Training hours per year English service / POS 175 Gung Ho! ambassador 110 Chef 104 Middle management 200 Headquarter office 148 (Training hours per person in 2013) In order to realize our mission to “Change people’s lives”, we built a talent center on the 3rd floor of our headquarters, specifically for the purpose of providing a dedicated space for learning and development. Every week the third floor is alive with activity, whether it be our orientation programs, management coaching sessions, or one of the special sessions where an outside trainer is brought in to provide specific training or guidance on a given subject of their expertise. People Pg. 19 1. Orientation program: All new team members will participate in a 4 day orientation program, where they will learn company culture, our company vision, and company objectives through interesting games, story sharing, and films. 2. Weekly training: Every week, we provide training related to working skills, life attitudes, career planning, environmental protection, and more, enabling them to develop themselves personally and professionally. 3. Quarterly evaluation: Every quarter, 100% of our regular employees will get an ABC performance assessment based on the “Topgrading” system. The objective is to understand a team member's performance, provide them detailed feedback, and help them to find their development direction, indentifying areas for further training or improvement. 4. External Training: Our company provides funds for high performance employee to attend external professional training courses, in a multitude of areas such as accounting, human resources, cooking, or environmental protection. People Pg. 20 Diversity and Equality At Gung Ho! Pizza, we don’t discriminate based age, gender, race, disability or educational background. Everyone is treated equal when it comes to wages, benefits, and developmental opportunities. Headquarters Operations Total Male 6 Female 11 Male 90 Female 42 Male 96 Female 53 (Gung Ho! Pizza employees - EOY 2013) We also prefer to develop and promote from within before looking to external prospects. 56% of our management positions have been promoted from entry-level positions. Six of our nine senior managers were hired locally in Beijing, five of them started on the frontline, have been promoted up through the ranks, and they have been working with our founder for more than 10 years. (Add infographic) In order to show support and “take care of Gung Ho! team members” with hearing disorders, in December 2013 we held a 3 hour “Silent program” in our headquarters and central kitchen. During these 3 hours, everyone wore earplugs and was forbidden to speak, in order to gain a tiny understanding of what life is like for our hearing impaired team members every day. One of our all-stars, Ray started to teach us sign language during every weekly meeting. (Ray teaches us sign language) Family At Gung Ho!, we also understand that family is one the most important aspects of our team members’ lives. It is in that spirit that we support our members as well as their families. People Pg. 21 Gung Ho! Kindergarten: One of the biggest concerns for every Gung Ho! parent is always their children, so in effort to support them we started a “Gung Ho! Kindergarten”. Every week for 1 day, Gung Ho! parents can bring their babies to work. This plan is new, but we wish to have a more permanent Gung Ho! Kindergarten in the future. Maternity and Paternity Leave 100% of our employees who took maternity or paternity leave have retained their jobs and come back to work after their sabbatical. (Babies in Gung Ho! kindergarten) Planet Pg. 22 Planet (blank section title page) Planet Pg. 23 The environmental pillar of the Triple Bottom Line philosophy is simplified as planet. Quite simply, planet measures the level to which a company has achieved sustainable environmental practices to minimize the impact a business has on our physical world. Whether you call it eco-capitalism or going green, the goal of a TBL company is to minimize the negative impact of carrying out business on our delicate world. Planet We understand that our business has its footprint on our environment and we want to do something about it. In August 2012, we hired a sustainability consulting company We-Impact to help us with sustainability program planning. In September 2012, we created our Environment Department, hiring our Environmental Manager Laura Xiao and inducting 6 volunteers from within the organization to join a “Green Team.” After several rounds of workshop with We-Impact, based on an internal environmental auditing, we set our Vision, Mission and Goals for the newly created environmental department. Vision 愿景 Create a sustainable business model in China. Be the Patagonia of Pizza. Mission 使命 Create a sustainable business blueprint through implementing our triple bottom line philosophy to influence our community and the planet. Goal 目标 Ensure %100 of our suppliers are sustainable, closing the loop. Use Gung Ho! Pizza's Triple Bottom Line philosophy impact the lives of our Stakeholders. Be recognized as a best-in-class Triple Bottom Line operation. Planet Pg. 24 Waste Waste Management In January 2013, Gung Ho! began to manage waste by classifying all waste to five categories, as well as tracking, weighing, and recording all waste. By recycling paper, plastic, metal and glass, we have 4,109 RMB incomes in 2013 (saved or been paid that money from recycling?) Waste type Recycled Non-recycled Toxic Amount (Kg) Ratio(Percentage) Total waste 16768.16 22547.94 22 42.63% 57.32% 0.06% 39338.09 (Gung Ho! waste 2013) Waste type Food Waste Food – Discarded Waste – Farm Recycled Recycled Non(Paper) recyclable (Plastic, Metal, Glass) Toxic Amount (Kg) 16356.13 8607.4 3499.99 4660.77 6191.81 Ratio (Percentage) 41.58% 21.88% 8.9% 11.85% 15.74% 0.06% Treatment Landfill/ Recycled Recycled Recycled Landfill/ Incineration /Chicken Incineration Feed (Gung Ho! members weighing and recording waste.) Total waste 22 39338.09 Keep for now Planet Pg. 25 Waste Reduction In order to reduce waste and save resources, we tried to get rid of all disposable eating utensils in the company. Beginning in 2013, we abandoned the use of disposable trays & chopsticks for staff meals. Every year this will reduce 2 tons of waste going to landfills/ incineration, saving 17 trees and 26,462.00 RMB in packaging costs. Paper cups have been replaced in the office with reusable glass or plastic cups. Every year this will reduce 53.76kg of waste, saving 1 tree and 322.00 RMB. Planet Pg. 26 In March, 2013, the Gung Ho! Green team climbed the Great Wall and collected 42kgs of waste! Energy In Gung Ho! Pizza, our main energy consumptions come through electricity, natural gas and petrol. In 2013, we consumed 349,961 KWH of electricity, 4,182 square meters of gas, and 570 liters of petrol. (Green team cleaning at the Great Wall.) We understand that energy & water consumption is our biggest emission source and as energy cost keeps rising, we have both economic and environmental motivation to reduce our energy consumption. (Contradictory, biggest is energy and water, or electricity, gas, & petrol?) 1. Energy saving training & spot checks: We give energy saving training to all of our operation management team, and to ensure the systems are well implemented, we do weekly spot checks. 2. Energy auditing and electricity equipment removal: Based on energy auditing, we identify electrical equipment that is not necessary and remove them from operation. (for example: juice refrigerators and heating lamps) 3. Use energy efficiency products: To reduce energy use on our food delivery electric bikes, we use normal bikes for short distance deliveries, every year this will save 365 KWH of electricity and 1,822.00 RMB per bike. Planet Pg. 27 Packaging As a food delivery business, we have a lot of paper & plastic food packaging, it’s a big impact on the environment both through its production & eventual disposal. Paper packaging: • To avoid cutting down trees and reducing the emissions for paper production, we’ve started using recycled paper to produce pizza boxes from September 2013, helping us to save 269 trees per year. • Most of our other paper packaging began using recycled paper in August 2013, helping us to save XXX? trees per year. • In addition to packaging, all of our menu flyers began using recycled paper in March, 2013, helping us to save 105 trees per year. Plastic packaging: • In 2013, we used 3.27 tons of plastic packaging. Currently, all of our plastic food packaging material is PP?. This is a safe material to contain food and it’s recyclable when it is made a part of the recycling process; however, it’s not biodegradable for hundreds of years when enters a landfill. (China currently does not have a very advanced recycling process for plastic locally, so most plastic become part of a landfill.) • In order to reduce this non-biodegradable PP plastic entering our landfills, we’ve started to search for biodegradable plastic to replace current packaging, and we plan to start using the new materials in early 2014. Planet Pg. 28 Reusable packaging: • In addition, since one time use packaging is a tremendous waste of resources and will generate a great deal of waste without proper recycling systems, we have also begun explore the possibility of reusable packaging, for example with reusable pizza boxes. • In June 2013, we launched a reusable pizza box design competition, and received many many interesting entries. We evaluated possible materials to produce such reusable boxes, but we face high modeling costs that are currently prohibitive for consideration. We’ll keep exploring other opportunities and alternatives. Packaging upcycle To encourage creativity and team work, we launched an internal Pizza box upcycle activity. Check out how creative it can be! Planet Pg. 29 Emission We believe climate change is a serious problem worldwide, so we’re doing our best to do our part to monitor and reduce our emissions. In 2013, our total emission estimation is 350,702.99 Kg CO2, calculated in the following areas: Area Carbon Footprint 2013(kg) Electricity Gas 316365.12 9053.98 Employee transportation 21177.11 Business transportation 4106.79 Total Carbon footprint(kg) 350702.99 We’ve identified electricity use as our biggest emission source, so our future emission reduction will be focused on reducing electrical usage. Sustainable Building Materials Of all our environment impact, we think store construction is the hardest one to improve and change, so we want to do it right at the very beginning. Gung Ho! is in a rapid development period, and we have new stores opening as well as old stores being renovated every year. For every project, we want to make it as green as possible. Planet Pg. 30 Our Wangjing store opened in September 2013, and is our first store to implement green building materials. More than 33% percent of the materials used are environment friendly. • Green materials: we tried to choose recycled material as much as possible (coal gangue bricks & compressed, recycled wood) • High efficiency equipment: Where possible, we use high efficiency equipment for energy & water saving (LED lights & water saving taps) • We’re reviewing LEED CI design guide, with more comprehensive coverage, including HVAC efficiency improvement and more. This will be our target for future construction & renovations. Environment Training In addition to taking action to reduce our environment impact, we believe educating and helping people to make changes in their own lives to be even more valuable and essential. Planet Pg. 31 Most of our team members have never had environmental protection education prior to joining our company. If our employees can’t learn to understand why environmental protection is important, it’s hard to imagine that they could support our initiatives on daily basis. At Gung Ho!, all of our members have the opportunity to join numerous environment training sessions and activities: • Orientation training: Within the 4 day orientation training, we dedicate 2 hours to environmental training so that all the new employees will have the opportunity to understand why we care for our environment and what we plan to do to create positive change. • Quarterly environment training: Every quarter we choose an interesting environment topic for training. Examples of past training include: Air pollution, water conservation, and waste management. • Monthly green activities: Every month we organize an external green activity. Waste landfill visits, roof garden visits, or planting gardens for poor children are but a few of the activities we have organized. Contact Information Pg. 32 Contact Information To replace a photo with your own, right-click it and then choose Change Picture. Jade Gray Title Tel [Telephone] Fax [Fax] [Email Address] Lucy Hu Title Tel [Telephone] Fax [Fax] [Email Address] John O’Loghlen Title Tel [Telephone] Fax [Fax] [Email Address] Laura Xiao Title Tel [Telephone] Fax [Fax] [Email Address] Company Information Gung Ho! Pizza Shop 2 / Hairun Int'l Apartments Cnr Jiangtai Rd & Fangyuan W Rd Beijing, China Tel +86 010-5135-8557 Fax [Fax] http://www.gunghopizza.com Global Reporting Initiative Pg. 33 Global Reporting Initiative G4 Content Index, GRI in accordance option – Core GRI indicator Report General Standard Disclosures status Page Strategy and Analysis Provide a statement from the most senior decision-maker of the organization (such as G4- CEO, chair, or equivalent senior position) about 1 the relevance of sustainability to the organization Full 4 Full 2 Full 9 Full 9 Full 7 and the organization’s strategy for addressing sustainability. Organizational Profile G43 Report the name of the organization. G4- Report the primary brands, products, and 4 services. G4- Report the location of the organization’s 5 headquarters. Report the number of countries where the G46 organization operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report. Global Reporting Initiative Pg. 34 G47 G48 Report the nature of ownership and legal form. Full 9 Full 9 Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries). Report the scale of the organization, including: Total number of employees Total number of operations G4- Net sales(for private sector organizations) or net 9 revenues (for public sector organizations) Partial 9,25 Total capitalization broken down in terms of debt and equity(for private sector organizations) Quantity of products or services provided a. Report the total number of employees by employment contract and gender. b. Report the total number of permanent employees by employment type and gender. c. Report the total workforce by employees and supervised workers and by gender. G4- d. Report the total workforce by region and 10 gender. e. Report whether a substantial portion of the organization’s work is performed by workers who are legally recognized as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors. Partial 25 Global Reporting Initiative Pg. 35 f. Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries). G4- Report the percentage of total employees 11 covered by collective bargaining agreements. G412 Describe the organization’s supply chain. N/A N/A Full 18 Full 35 Report any significant changes during the reporting period regarding the organization’s size, structure, ownership, or its supply chain, including: G4- Changes in the location of, or changes in, 13 operations, including facility openings, closings, and expansions Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organizations) Changes in the location of suppliers, the Global Reporting Initiative Pg. 36 structure of the supply chain, or in relationships with suppliers, including selection and termination. G414 Report whether and how the precautionary approach or principle is addressed by the Full 27~36 Full 4,5,6 Full 13,14,17 organization. List externally developed economic, G4- environmental and social charters, principles, or 15 other initiatives to which the organization subscribes or which it endorses. List memberships of associations (such as industry associations) and national or international advocacy organizations in which G416 the organization: - Holds a position on the governance body - Participates in projects or committees - Provides substantive funding beyond routine membership dues - Views membership as strategic Global Reporting Initiative Pg. 37 Identified Material Aspects and Boundaries a. List all entities included in the organization’s consolidated financial statements or equivalent documents. b. Report whether any entity G417 included in the organization’s consolidated financial statements or equivalent documents is Full 7 not covered by the report. The organization can report on this Standard Disclosure by referencing the information in publicly available consolidated financial statements or equivalent documents. a. Explain the process for defining the report G418 content and the Aspect Boundaries. b. Explain how the organization has 38 implemented the Reporting Principles for Defining Report Content. G4- List all the material Aspects identified in the 19 process for defining report content. 38 Global Reporting Initiative Pg. 38 For each material Aspect, report the Aspect Boundary within the organization, as follows: ?Report whether the Aspect is material within the organization ?If the Aspect is not material for all entities within the organization (as described in G4-17), select one of the following two G420 approaches and report either: – The list of entities or groups of entities 38 included in G4-17 for which the Aspect is not material or – The list of entities or groups of entities included in G4-17 for which the Aspects is material ?Report any specific limitation regarding the Aspect Boundary within the organization For each material Aspect, report the Aspect Boundary outside the organization, as follows: ?Report whether the Aspect is material outside of the organization ?If the Aspect is material outside of the G4- organization, identify the entities, groups of 21 entities or elements for which the Aspect is material. In addition, describe the geographical location where the Aspect is material for the entities identified ?Report any specific limitation regarding the Aspect Boundary outside the organization 38 Global Reporting Initiative Pg. 39 G422 G423 Report the effect of any restatements of information provided in previous reports, and the N/A N/A N/A N/A reasons for such restatements. Report significant changes from previous reporting periods in the Scope and Aspect Boundaries. Stakeholder Engagement G4- Provide a list of stakeholder groups engaged by 24 the organization. G4- Report the basis for identification and selection of 25 stakeholders with whom to engage. Full 8 Partial 8 Report the organization’s approach to stakeholder engagement, including frequency of G426 engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process. Report key topics and concerns that have been raised through stakeholder engagement, and G427 how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns. 8 Global Reporting Initiative Pg. 40 Report Profile G4- Reporting period (such as fiscal or calendar year) 28 for information provided. G429 G430 Full 38 Date of most recent previous report (if any). N/A Reporting cycle (such as annual, biennial). Full 38 Full 38 Full 39 G4- Provide the contact point for questions regarding 31 the report or its contents. N/A a. Report the ‘in accordance’ option the organization has chosen. b. Report the GRI Content Index for the chosen G432 option (see tables below). c. Report the reference to the External Assurance Report, if the report has been externally assured. (GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines.) Global Reporting Initiative Pg. 41 a. Report the organization’s policy and current practice with regard to seeking external assurance for the report. b. If not included in the assurance report accompanying the sustainability G433 report, report the scope and basis of any external assurance provided. c. Report the relationship Full 38 Full 7 between the organization and the assurance providers. d. Report whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report. Governance Report the governance structure of the G434 organization, including committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts. Ethics and Integrity G456 Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics. Full 5,6