Each year more and more food and grocery companies are responding to the challenge of becoming more environmentally friendly and are publishing their Corporate Social Responsibility (CSR) reports. These document their ambitions and achievements towards environmental and social targets.

This growth in CSR reporting is a positive thing as it demonstrates the industry’s commitment to the environment and society, and helps increase transparency.

	According to the GRI, there was a 29% increase in sustainability reporting from 2008 to 2009

However, it is important to recognise that just because a business has a CSR strategy this does not mean that it has a sustainable business strategy.

In the past, CSR strategies have been a separate entity to a company’s business (financial) strategy. But as demand for global resources continues to increase and the business case for greater efficiency is becoming more apparent, captains of industry are beginning to understand the link between CSR and business continuity.
 

Business case for sustainability

At the beginning of 2011, Sainsbury’s announced that it will become the first retailer to fully integrate its corporate responsibility and financial performance in its 2011 annual report. Sainsbury’s has recognised the significant cost savings that can result from saving carbon and becoming more resource efficient. A more integrated approach to corporate responsibility and financial performance is also inextricably linked to the long-term sustainability of its business.

Sustainable businesses that invest in green economic growth can cut costs, drive innovation, reduce risk and motivate employees.     Richard Evans, President, PepsiCo, UK & Ireland

Cost saving

In January 2007, Marks & Spencer (M&S) launched Plan A - its plan to tackle key challenges on climate change, waste, sustainable raw materials, fair partnership and health over five years. M&S thought it would cost £200 million to implement but this plan is already recouping millions to its profits. In March 2010, M&S extended Plan A further, to encourage all of its customers and employees to start living ‘greener lifestyles’ and embedding sustainability into the way it does business. The original 100 Plan A commitments have been extended to 180 with the ultimate aim of M&S becoming the world’s most sustainable retailer by 2015.

Our customers rely on us to offer them affordable products. Being more sustainable has delivered both significant financial and environmental savings which enables us to save our customers money every day.     Paul Kelly, External Affairs and Corporate Responsibility Director, Asda

In Tesco’s 2010 CSR report, it pledged to be a zero-carbon business by 2050 without purchasing offsets. According to Sir Terry Leahy, chief executive of Tesco, the business case for such a bold commitment can be answered by looking at its recently opened zero-carbon store in Cambridgeshire. The store may have cost 30% more to build, but it uses 50% less energy. He said: “With oil at $70 a barrel, that’s a business case in itself”. Like M&S, Tesco is also looking beyond its own immediate impact and has pledged to cut emissions in the products in its supply chain by 30% by 2020. It has also committed to identify ways in which its customers can halve their household carbon footprint by the same date.
 

Manufacturing success

It is not just the retailers that are starting to take a more holistic approach to sustainability and business continuity. Unilever unveiled its ambitious new sustainability plan that aims to double sales and halve the environmental impact of its products over the next decade.

Paul Polman, the chief executive of Unilever, sees no conflict between Unilever achieving its sustainability goals and growing its business. He said: “We are already finding that tackling sustainability challenges provides new opportunities for sustainable growth: it creates preference for our brands, builds business with our retail customers, drives our innovation, grows our markets and, in many cases, generates cost savings.”
 

	A recycling scheme aimed at customers, from the wholesaler Booker

Business as unusual

According to a recent Carbon Trust survey of decision makers in top UK businesses, 92% believe green growth represents an opportunity for their business. However, only a third of top UK businesses are actually investing money in the research and development of green products and services.

A possible catalyst for businesses to focus on sustainable growth could be the launch of the new Foresight report. It argues for fundamental change to the global food system, and beyond, if a rapidly expanding global population is to be fed over the next 40 years. The report warns: "Without change, the global food system will continue to degrade the environment and compromise the world’s capacity to produce food in the future."

According to Professor Sir John Beddington, the Government’s chief scientific adviser and head of the Foresight programme: "The food system is already failing.” He has stated that it is “unsustainable”, with resources being used faster than they can be naturally replenished.
 

Showing foresight

The food and grocery industry is proactively looking for solutions to become more sustainable. It recognises that a business as usual viewpoint is not appropriate and the industry needs to keep altering the way it does business, as the global food system experiences unprecedented challenges over the coming decade.

At the recent World Economic Forum in Davos, Sir Terry Leahy told a distinguished panel of representatives of government and industry that it will be private companies that will lead the way to greener economies.

Sir Terry said governments needed to create the regulatory environment that will allow private companies to lead the way in bringing about economic growth that is sustainable in every sense, working to make green choices cheaper, simpler and more attractive to consumers.

The challenge is to tap into consumer power. Encourage consumers to go green, not just by saving energy but buying products with a low carbon footprint – if we can do that, then we will create a mass movement in green consumption.     Sir Terry Leahy

More information:

	Industry CSR reports
	A gallery of links to retailers’ and manufacturers’ CSR reports.

	Best practice case studies from the industry
	Read these case studies to learn how other food and grocery companies are meeting a variety of significant sustainability challenges.

	Sustainability: understanding the FMCG perspective	Next workshop on 22 June
	This practical one-day workshop is designed to help you develop your understanding of sustainability within the FMCG industry. You'll learn about key sustainability issues and how they relate to your business, retailers' sustainability offers, the role of the shopper and the challenges for the future.

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Toby Pickard is a Sustainability Business Analyst at IGD, contributing to and managing IGD’s in-depth sustainability web area - a free resource designed to help food and grocery companies understand and meet the challenges posed by the ever changing and evolving sustainability agenda

Toby has worked on IGD’s Sustainable Strategies report, and written and presented our Sustainability strategies of food and grocery retailers in-house training course. He is also a tutor on IGD’s Sustainability: understanding the FMCG perspective workshop.