Hoijtink Advies - PetfoodIndustry

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Corporate Social Responsibility,
from whim to a matter of strategy
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Remember 2000?
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•Dow Jones 12000 and rising
•Unknown prosperity because of internet
•Fukuyama’s ‘End of history’
•Sustainability: for idealists and do gooders
•Corporate Social Responsibility (CSR): Esso’s
chairman ”it is none of our business”
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Economic crisis
The state of the planet
The people on the planet
Dow Jones sustainability index
Buzz words: CSR, sustainability, People Planet Profit
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What about the planet and people in 2020?
Is that your business?
Not my problem
Shouldn’t the government act?
Are things really that bad?
You abide the laws, rules and regulations, so what?
The correct questions?
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Wrong questions
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National Geographic March
2010: cattle farming and
“We have to realize that the
general U.S. population
wants wolves. That
population is also our
customers for beef. It’s not
a good idea to tell your
customers they don’t know
what they’re doing. So
instead of taking a hard line
and fighting to get
everything back to where it
was 50 years ago, we’re
trying things like…”
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It is your business because:
• Many stakeholders worry about the state of the planet
and the fate of its people
• ‘The business community has its own responsibility’
• They want you to act
• Their perceptions count
• You nor your company can change that, so…
Go with the flow
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How far should you go, what should you do?
• Not a thing?
• A bit more?
• A real effort?
• Be a front runner?
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How far you should go depends on:
• Who do you have to/want to make happy?
• Your risks (defensive reasons)
• Possible benefits (offensive reasons)
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Who do you want to make happy?
All your stakeholders, however
people are not the same:
• Environmentalists 3%
• Cultural creatives 30%
• Average 42%
• Laggards 25%
Difference per stakeholdergroup: clients, employees,
bankers, trade unionleaders, politicians, civil servants,
retailers, shareholders, suppliers,
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What may happen if you can’t make
them happy?
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Risks. Clients.
Philips suppliers programme:
• program from industry peers in
order to create a better impetus for
change within electronics sector
• helps create a sustainable supply
• supply managers must select
suppliers and business partners in
accordance with these principles
(2015: 50% of all products 10% above average
in packaging use, energy efficiency, waste,
life span)
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Risks. Employees.
serious sustainability programme results in:
Higher employee loyalty
Less employee turnover
Easier recruitment of top quality people
90% of Belgians: employers should care about the environment
60% of Flemish take the environmental efforts of their potential employer into consideration
Novo Nordisk, 5 % drop in staff turnover, after launching CSR programme
Sears: 20% reduction in staff turnover since implementing CSR program
Canada: CSR important to employee morale 50%, loyalty 41%, retention 29%, recruitment of top employees 25% and
productivity 12% (Society for Human Resource Management)
Canada: 70% would consider changing jobs if their employers did not operate in a socially responsible manner
Aspen Institute: 26% of MBa students 2007 say the potential of making a contribution to society is important in job
selection compared to 15% in 2002
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Risks. Banks.
RABO AAA top 25 cooperative bank
• Discusses CSR efforts with clients
• Refused cattle transport
• Stopped business with mink
farms and non sustainable fishing
• 2001: ‘treason’
• Profiting from sustainability
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Risks. Civil servants.
• Heavy rains caused collapse of
• Years of discussions to rebuild
• Heavy rains caused collapse of
• Reopening after a very short
period of time
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Risks. Retailers.
Albert Heijn pork choice:
• Standard
• Animal Protection, Better Life, one
• Animal Protection, Better Life, two
• Animal Protection, Better Life,
three stars=biologic
• From 2011: No more standard
pork, only ‘Better life Pork’
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Risks. Retailers.
Walmart: ‘we only want to do
business with companies that
support our CO2 emission
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Risks. Shareholders.
Vedanta Mining Company
Dongria Kondh tribe protests new mine
Actress Julie Christie supports claims
Scottish Universities Pension Fund sells shares
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• $ 100.000.000
investment in sustainable
supply chain cocao
• Prevents burning rain
• Improves quality cocoa
• Better quality of life
Target: all Mars cocoa
sustainable in 2020
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Mars, a first result
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Risks industry level
“A vegetarian in a Hummer is better for the
environment than a meat eater in a
Toyota Prius”
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Risks industry level
The supply chain:
• Climate change for 51% caused by livestock (WWI,Washington)
• Meat: perceptions about the industry, livestock farming,
animal transport…
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Risks: pet food
• Poultry: slaughterhouses,
free range chickens….
• Unilever Europe: 475
million free range eggs
• Unilever: PT Smart palm
oil plantation…
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Risks pet food industry
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Risks: pet food industry
• Fish: overfishing, sea bottoms, extra catch, fish farms,
pollution, mangrove forests…
• Mars: Whiskas-Sheba Europe MSC fish (The Guardian)
• Corn: toxins
• Origins, control…
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Risks pet food industry
• Carbon footprint meat
• Diminishing demand
• Carbon footprint pets:
Twice a 4 by 4 for dogs?
Vale, University of Wellington)
• Paul McCartney in EP
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Company level:
• Waste: packaging, transport, energy. Pollution, noise…
• Working conditions, equality
• Suppliers: office equipment, transportation,
• Transparency
• Stakeholder discussions
• Safety measures
• Integrity
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Possible benefits:
• Reputation is a leg up for doing business
• Your whole company benefits from a good reputation
• CSR is one of the most important factors in reputation
• CSR results in cost savings
• It may boost your sales, the more so if you aim at
environmentalists and cultural creatives
• Motivates employees
• Improves internal and external contacts
• Leadership
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Possible benefits:
10 years ago
• sustainability for do
gooders and idealists
• well meant nonsophisticated products
• low quality, simple
packagings and
• a good CSR reputation
stands for quality, ‘up to
standard’, sexy
• Whole Foods Markets
• Hybrid cars
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Novus headquarters
• largest array of solar panels in Missouri
(5,000 square feet);
• 100% of energy purchased through
renewable energy credits;
• 30% of materials from recycled content,
(countertops from recycled milk jugs
plus scrap aluminum, fitness center
floor from recycled tires);
• under-floor air distribution system for
high energy efficiency;
• saving thousands of gallons of water by
special landscaping
• plant “canopy” for natural shading;
• storm water system to reduce runoff;
• skylights and floor-to-ceiling windows to
maximize use of natural light;
• preferred parking for low emission and
fuel efficient vehicles.
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Canidae Woodward Oklahoma
• wind energy
• 34 towers
• up to 50 Mw
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Cardinal Pet Care
•Azusa plant 100 % solar
•White cool roof temperature
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How far you go is a strategic choice, because:
• It influences all aspects of your business
• It is a long term approach
• It decides where your business will be in 2020
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How far you go:
DSM, Shell, AKZO Nobel, TNT, ING: green bonuses for
board members
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Other examples:
•Guide dog programme: Purina Brazil
•PetPartners: Purina USA
•Animal shelters: Purina USA
•Can recycling through Recycle Bank
•Energy from renewable sources
•Environmental certification ISO 14001
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Prioritise-concentrate; maximise impact
Use existing know how (proven checklists)
Formulate/implement targets
Do not forget the nice things (people’s business!)
Be transparent
Stakeholders dialogue (also with NGO’s)
Prove what you say
Right tone of voice
Have patience
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Some tips:
• involve your employees
• formulate precise sustainability targets
• use sustainability-related criteria in a decisionmaking process like capital expenditure budgetting
• join forces, look for partners (horizontal, vertical)
• up to 75% of consumers prefer green products
• up to 20% of consumers prepared to pay slightly
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So what will your answer be when your
stakeholders ask you about your CSR programme?
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