Ethical Corporation’s annual Responsible Business Summit London, May 7-8, brought together global experts to share their experience and discuss the latest sustainability challenges faced in 2013. Talks were focused around how smart businesses can gain from being climate-conscious leaders, how to embed sustainability into company management and how to engage customers. Following are the highlights and insights from the sessions we joined on Day 1:
COLLABORATION IN THE NEW ECONOMY
Greenpeace UK John Sauven – Executive Director
The Economist Daniel Franklin – Executive Editor
Janssen Pharmaceuticals Jane Griffiths – Company Group Chairman
RiiЯ Tom Vesey – Chief Executive Officer
London Business School Ioannis Ioannou – Assistant Professor of Strategy
In this session the speakers were asked to consider what might society, governments and businesses working together be able to deliver for a greener sustainable recovery – and what are the challenges this idea throws up?
John Sauven (Greenpeace) talked about deforestation being the important issue; Jane Griffiths (Janssen) believes that, with an aging population, Alzheimers is one of the great focuses we have to have and that working with academic institutes will be important; Daniel Franklin (Economist) states collaborators must be clear what they are trying to achieve or problems may occur; and Tom Vesey (RiiЯ) says people should be thinking in the long-term, not just short-term.
Jane Griffiths concurred that long-term commitment is crucial in pharmaceutical collaborations – you can’t just dip in and out of health – you need NGOs on the ground setting up secure infrastructures.
It was agreed that in certain collaborations there’s a role for government intervention. For instance, the absence of effective government was the missing link in the recent Bangladesh disaster, where a factory collapsed – building regulations existed, but they were not enforced. The onus is on corporations to ensure local laws are upheld, as difficult as this may sometimes be.
Tom Vesey says firms need to be flexible and interactive. Successful businesses are close to and listening to customers and communities.
INVESTMENT IN GREEN TECHNOLOGY
Speaker: Minister of State for Climate Change The Rt Hon Gregory Barker
What will make the UK more competitive in a resource constrained world?
Gregory Barker says we need to stop looking at things in silos and create more of a joined up whole. Green growth is not limited to a traditionally recognised green sector, or to specific government departments – the Energy Department and Defra are part of the same story. Also, responsible businesses and government have to work together; we can’t just rely on old business models to deliver new solutions.
Businesses and entrepreneurs are beginning to recognise, for instance, that nature is a provider of resources and that the value of nature needs to be accounted for in both day-to-day operations and in long-term investments. As a result of making decisions in this way, businesses are becoming more competitive.
In acknowledgement of this the Government has established The Eco Systems Market Taskforce, which reviews possible business opportunities that arise from valuing nature, in an effort to align economic growth and the health of our natural resources. See the 2013 report here. Also see The State of Natural Capital by the Natural Capital Committee.
Gregory quoted the Prime Minister as having said: “We are in a global race for limited resources…and it’s the most energy efficient companies that are going to win”. Energy efficiency is the starting point for a greener economy, Gregory continued, it doesn’t matter what type of energy you’re producing, the first thing you should do is to reduce the amount you’re using.
The Government’s Green Deal was set up to lower energy bills by retrofitting and improving the whole of British housing. It also creates a new market for energy efficiency products.
Here in the UK we have a massive program of investment in our energy infrastructure. Already we have the largest offshore wind farm coverage in the world, along with other new technology programs, such as carbon capture, but we can’t do it all on our own. Replacing and upgrading our low carbon infrastructure in the next decade will require capital investment equivalent to building 20 Olympic stadia every year until 2020. We have to increase commercial deals to make this happen.
The Government’s Green Investment Bank is encouraging overseas investors to put their money into the low carbon sector. Innovation is key to keeping the UK ahead of the game as an attractive place to base low carbon businesses. Last year green growth contributed to a third of all growth in the British economy.
HOW THE COMPANY OF 2020 WILL OPERATE IN A
Calvert Investments Barbara J. Krumsiek – Chief Executive Officer and Chair
CSM Global Gerard Hoetmer – Chief Executive Officer
Britain’s chief scientific adviser forecasts that by 2030 the world’s population could rise by up to a third; demand for food and energy will rise by 50% and fresh water by 30%: How will this affect how large companies operate?
Calvert Investments is a leader in sustainable and responsible investing. They analyse global risk to help identify attractive opportunities in the market and assess the long-term potential. They pressure companies to improve their practices, primarily through shareholder activism, but also by engaging with them in discussion and evaluation.
Barbara Krumsiek says that efforts to engage companies can be enhanced with more transparency and better supply-chain data. She’s confident that with advances in technology, allowing better access to information, they’ll be able to gain a fuller understanding of the resources we all depend on.
Generally, says Barbara, education can make things better, including improved labelling of packaged products. Consumers would value being able to find out what goes into the production of a product, such as how much energy or water was used. They can then make informed decisions. This summer Calvert will be launching a water app to let people monitor their water use, because they think it’s important for investors, and individuals, to recognise these sustainability issues.
See the video below for Calvert’s approach and strategy to the water sector.
Gerard Hoetmer says scarcity of resources is fundamental. He’s the CEO of CSM Global, a leading producer of bakery ingredients, supplying companies such as Walmart and Tesco. The company aims to provide for a healthier, more sustainable world, with ample food, through the smarter use of natural resources.
They are pioneering innovators, using bio-based ingredients for preserving, fortifying and for making bio-plastics – all with improved performance and environmental credentials. GSM believe Biotech is the 4th revolution and this will change the world (1st = Agriculture, 2nd = Industrial, 3rd = IT).
Gerard also considers the Circular Economy to be the way ahead. We should look to what’s being thrown away – we can’t carry on living this way. We use something and throw it away, when our waste could be raw material to produce something else. He proposes we should use the media to tackle the waste issue we’re going to face.
DRIVING SUPPLIER PERFORMANCE
In this session, which was moderated by Mike Barry, Head of Sustainable Business at Marks and Spencer, we found out how brands are hitting ambitious environmental performance targets. There were examples from Mars on improving supplier productivity; practical tips from ASDA to help suppliers identify water, waste and energy savings; and lessons from a European retailer on how they moved beyond traditional carbon offsetting to create improved communities, bio-diversity and health for their suppliers.
ASDA Julian Walker Palin – Head of Corporate Sustainability
Asda turn over £20 billion a year – you can imagine the thousands of suppliers they have. So how do you engage such large numbers in sustainability? And how do you remain profitable while making sustainability affordable and accessible to everyone?
Asda are tackling it through The Sustain & Save Exchange programme. Developed and managed by 2degrees, it enables Asda and its suppliers to share knowledge and innovations in energy, waste and water efficiency through an online platform. See it explained in the video below.
A sixth of the Asda’s suppliers are currently using the Exchange and it’s being expanded across the company’s entire fresh, frozen and chilled supply chains, making it the biggest supply chain collaboration program for sustainability in the UK.
The Exchange enables companies such as Youngs Seafood, Warburtons and Cranswick to share best practice across a range of sustainability issues, including closed-loop crop feeding and solar power technologies, designed to improve the environmental impact of Asda’s entire supply chain, as well as save suppliers money.
Asda has also reduced the amount of waste it sends to landfill, with 93% of the remaining waste – including all unsold food – now being recycled through various projects, including energy conversion programs.
Climate Friendly Mike Tournier – General Manager Europe
Climate Friendly provides innovative carbon management solutions to businesses around the world. They support a reduce-and-offset approach to carbon management, but they go further than just classical offsetting. They think about the best way businesses can get more involved, take voluntary action and create an engaging story around their action – they call it ‘insetting’.
The Kenyan based Oserian Flower Farm grows sustainable Fairtrade roses. These are exported to Coop Switzerland. In order to offset transport emissions, Coop Switzerland teamed up with Climate Friendly and WWF to develop a clever solution that turned a problem into a benefit.
They invested in a community based project that distributes modern, efficient cooking stoves to the local Maasai villages. This combines carbon mitigating with sustainable development, reducing the release of harmful emissions, decreasing the demand for firewood by 50%, reducing indoor-smoke inhalation and providing healthcare improvements. See the video for a quick overview.
Mars Inc Kate Wylie – Global Sustainability Director
Mars are making genuine efforts to change their supply chain and they’re throwing resources at it. Kate explained that generally cocoa plantation owners live a tough life. They have aging trees, depleted soils and unpredictable rainfall. Coupled with this they don’t have the means or the information to increase productivity.
Workers are beginning to look at the industry and ask if cocoa growing is a viable option for themselves and their families’ futures. Currently it might not look an attractive prospect. At the same time the demand for chocolate is growing – by 2020 it has been predicted it will outstrip supply by 1 million tonnes. There’s a significant shift that needs to be made.
Increased productivity is what’s needed to build thriving communities of cocoa growers. See the video below for how the Mars cocoa farm rehabilitation programme in Indonesia has begun to create higher cocoa yields.
Mars is taking a three-pronged approach to cocoa sustainability: 1. Scientific research; 2. Technology Transfer; and 3. Certification:
1. They’re looking at the science of what increases productivity. They’ve partnered with IBM and USDA to ‘unlock the cocoa genome’, which means that scientists all over the world can go online and view gene sequencing, so they can understand which varieties of cocoa are more resilient and productive. Mars has spent £8 million on this and they’ve made it open source.
2. They’re setting up village centres to communicate with hundreds of thousands of farmers worldwide. Here farmers can learn agriculture techniques, such as pruning and grafting and can get access to the fertilisers they need to start increasing their yields. Increased income can then be invested back into the communities to create prosperous plantations for the future.
3. They’re certifying their entire cocoa supply and they’re encouraging others in the industry to commit to certification too, to reach as many farmers as possible.
Take a look below for a visual summary of Coca Sustainability by Mars