Social responsibility has traditionally been at the very heart of the way Boots conducts business. With the publication of its first CSR report, the household name is realising the importance of articulating this vision.
Social responsibility is hardly a new concept at the Boots Group. Ever since John Boot opened his first herbal remedy store in Nottingham to sell affordable medicines to the city’s poor, Boots has had a strong sense of duty to contribute to society.
As his son, Jesse Boot, responsible for transforming the store into the health and beauty retailing giant we see today, said in 1919: “Our mutual interest are by no means restricted to business in any limited sense. Fellowship in creation, fellowship in ideals, common sympathies and common humanity bind us together and whatever fosters this happy union is valuable”.
Continuing this tradition into the modern day, the company’s chief executive Richard Baker says every successful business depends on winning the trust of those whose lives it effects. “As a business primarily concerned with the nation’s good health, being trusted – especially by our customers, but also by our employees, business partners and the communities where we operate – goes to the very heart of our enterprise,” he wrote in Boots’ first CSR report, published in August.
Despite this well established ethos, managing CSR at Boots is an enormous and complex task. The company has a large network of international operations, employs 69,631 people worldwide and in the UK and the Irish Republic runs 1,400 stores, serving 12m people every week. Boots Group, that is Boots – The Chemist, Boots Healthcare International and Boots Retail International, made a profit of £481m before tax on a total turnover of £5.47bn in the latest financial year.
EXPLICIT CSR
Perhaps surprisingly for a company with such a social legacy, Boots has not reported separately on its CSR programmes until this year. Hot off the press as Briefing visited the Nottingham campus in August, the company’s first CSR report – A healthy sense of responsibility – is the result of a year spent gathering details of Boots’ social and environmental programmes, explains Richard Ellis, Boots’ CSR manager. “Social responsibility has always been implied in the company’s operations, but now it’s explicit,” Ellis tells Briefing.
The report is the first stage in the company’s 5-year plan to create a fully integrated CSR programme across four areas: the community, the environment, the marketplace and the workplace. “Boots has been doing this [CSR] for years. In 2000, when CSR really started to take off, others were merely doing what had been second nature for Boots for a number of years,” Ellis says, citing the company’s What being responsible means to Boots booklet published as far back as 1986.
Boots’ 2005 report is a major step forward from this, being the first attempt to produce a Global Reporting Initiative (GRI) compliant report. The company hopes to supplement the report with a new CSR website, to be launched later in the year.
MANAGING CSR
Ellis was appointed as Boots’ first CSR manager early 2003 to bring together the strands of the company’s existing social and environmental activities, to define best practice and find the language to express this best practice. Ellis’ role is as a coordinator across the company’s operations, such as supply chain management, environmental management and human resources.
At the board level there is a Social Responsibilities Committee, chaired by Hélène Ploix, a non-executive director and member of the company’s remuneration committee. Paul Bateman, Boot’s human resources and operations director and an executive director has overall responsibility for the CSR agenda and activities. In addition, the CSR Action Group reports regularly to the board and is responsible for setting goals relating to each of the company’s CSR issues.
ALIGNING CSR WITH CORE BUSINESS
In 2003, Boots began work defining where it could make improvements, consulting with external stakeholders, benchmarking itself against recognised good practice and consulting across its workforce. As a result, Boots stuck to the Business in the Community’s grouping of four main areas of responsibilities: markets, environment, communities and workplace.
For each of these areas, Boots has set itself an overall aspiration and a ‘leadership ambition’; one specific aspect in which it believes it makes commercial and strategic sense for it to be recognised as a front-runner. In the community, Boots is aiming to excel on community healthcare, a leadership role that reflects its core business activity. In the environment, Boots is looking to lead in the responsible use of chemicals in consumer products – likewise a key part of what the company does. In the marketplace, Boots is looking to focus on cause-related marketing, an area that ties in well with its health and beauty product lines. And in the workplace, Boots wants to be recognised as a “great place for women to work”, which makes good strategic sense since 79% of its workforce and 83% of its customers are female.
These four areas are split into 21 CSR issues, in which it has set goals to be achieved by 2009, along with detailed performance data. The board formally adopted this framework on April 28, 2004. To maximise accountability, ‘issue owners’ have specific CSR goals written into their employment contracts.
ENGAGING LOBBY GROUPS
Boots’ willingness to communicate with external stakeholders has vastly improved in recent years. “It would be fair to say that we have not always been very good at talking to the outside world, particularly the NGO community,” Ellis says.
“There is a growing sense now in the business world that if companies are going to be successful they will have to start to embrace all stakeholders”. Simultaneously, NGOs are getting much better at seeking and engaging in productive dialogue. “The broadly based NGO community is realising that far more can be achieved with constant dialogue,” he adds.
Ellis reckons that Boots’ approach to environmental management is closely aligned to what NGOs want the company to do. The company’s leadership on the safe use of chemicals is a good example of this: in March 2003, Boots was the first UK retailer to publish a policy for the safe use of chemicals in its products. And the company participates fully in the EU REACH (registration, evaluation and authorisation of chemicals) initiative. Every quarter, the company publishes a Priority Substance List ( http://www.boots-plc.com/environment/library/265.pdf) that highlights chemicals of concern. This leads to an open dialogue between industry and consumer groups and NGOs.
ENVIRONMENT
A stroll through Boots’ 300-acre biodiversity garden at the Nottingham site quickly reveals the extent to which the company is embedding good practice into its everyday business. This approach to biodiversity is reflected throughout the company’s business operations: Boots’ biodiversity action plan focuses on the sourcing of raw materials, the biodiversity impacts of its products and the management of its property portfolio.
In response to the national climate change agenda, Boots has been reducing emissions through reduced energy usage, explains Jean Waring-Thomas, energy development manager. Again, features at the Nottingham headquarters reflect these efforts, with an onsite combined heat and power (CHP) plant providing power to Boots offices, factories and warehouses. The plant was recently awarded ISO 14001 Environmental Management Certification.
Throughout Boots national network of stores, the energy management team faces the challenges of raising awareness and getting individual managers involved, Waring-Thomas explains. Historically low energy prices had worked against the company’s carbon management focus, but with the recent rise in prices an effective programme is becoming increasingly important. Even the smallest of actions – lowering the blinds on the in store chilling cabinets overnight – can make a difference to the company’s total electricity bill.
In 2003, Boots decided to further improve its carbon footprint through joining with the Carbon Trust in a carbon management project. A range of opportunities to reduce carbon emissions was identified and an accurate system of utility data collection was set up. Key to the success of the programme was the establishment of robust procedures to embed energy efficiency into the carbon supply chain, particularly focusing upon design, maintenance, and procurement. The improvements are already included in new store designs and ongoing work addresses the reduction of energy use in the large number of existing stores.
COMMUNITY HEALTHCARE
Boots’ aim to be a leader in community healthcare is illustrated by a number of programmes. In efforts to help people enjoy the beneficial effects of the sun without harming their skin the company has teamed up with Cancer Research UK to promote their national SunSmart campaign, helping to educate customers and raise funds. The campaign ties in with Boots’ own-brand suncare range, Soltan.
Addressing the wider public health agenda, Boots has developed the Dental Playbox Project with Action for Sick Children (Scotland), designed to tackle the fact that 55% of children in Scotland have dental disease by the age of five. Boots estimates the initiative has reached 10,000 children. Likewise, volunteering schemes are focused on community health. An example of Boots’ volunteering initiatives sees its own-brand cosmetics (No 7) consultants use their time and skills to support Look Good… Feel Better beauty workshops for women with cancer, an initiative sponsored by the cosmetic industry. The free sessions take place in hospitals across the UK and to date has seen over 40 staff get involved.
In 2004/2005, Boots invested £3.9m in the community, with £75,367 donated to charities and good causes ranging from UNICEF and Cancer Research UK via Boots’ Employee matched funding scheme. The company reports and measures its CCI programmes through the London Benchmarking Group, managed by The Corporate Citizenship Company, the publisher of Briefing.
SUPPLY CHAINS
In 2005, Boots won the HBOS Supply Chain Award at the annual Business in the Community (BiTC) awards, as a result of its efforts to step up its supply chain verification programmes.
Given the sheer size of its product range, ensuring that all suppliers treat their workers fairly and show a responsible attitude towards the environment across all its lines is a huge challenge, but not apparently one the company has shied away from: Boots has so far verified nearly 600 suppliers, against an April 2006 target of 650.
Kevin Marriott, quality and CSR support manager, explains that Boots had always incorporated some aspects of accountability into its quality management processes, especially on issues such as health and safety and the environment. But in response to greater media scrutiny and visits from some of the ethical investment firms, the company saw a clear need for a rethink.
Boots believes that effective supply chain management is about partnership and engagement with the workforce “This is genuinely about being in partnership with our suppliers – about being engaged and trying to make sure they also benefit from the process,” Marriott says. “This is probably where we differ from a lot of our competitors, in the sense that they have largely used third-party assessors to do a lot of this work and pushed it down the supply chain”.
Boots’ supplier verification programme helps identify suppliers that have met, or have the capacity to meet, its code of conduct for ethical trading. Once the supplier is identified an assessment team visits and looks at five areas: ages, conditions of employment, wages and benefits, health and safety and environment. For an effective assessment, it is vital the workforce understand what is involved. “The assessment is ultimately about the people and not the products,” Rachel Grimmett, quality assessor in the quality and CSR team, explains. “It’s very important the employees aren’t kept in the dark and feel they’re involved from the very beginning”.
Boots has never discontinued business with a supplier solely on the basis of a breach of its code of conduct, Marriott says. “There have been suppliers in the Far East where we have in advance said we won’t do business because we believe there is a risk. The point is we want to work with the suppliers”.
The company works with a number of organisations to improve its supply chain policies. In May 2003, Boots joined the Ethical Trading Initiative (ETI) – an organisation that promotes best practice and monitors and assesses companies’ supply chain programmes.
But one big difference between Boots’ supplier code and the ETI is the inclusion of environmental factors in the assessment.
“We prefer to take a holistic approach: damage to the environment in a particular area will have an impact on the local infrastructure and therefore the workers, in our view,” Marriott says. In contrast, the ETI focuses on the direct impact on the suppliers’ workforce.
A holistic approach to supply chain management epitomises Boots’ overall approach to responsible business in the community.
With Ellis at the centre, coordinating activities and articulating the company’s vision, Boots is likely to make further strides in the management and reporting of CSR. No doubt, John Boot would have approved.
Richard trained as corporate banker with Midland Bank, where he worked on a number of urban regeneration initiatives and so began a career in the world of CSR. Over the past 25 years Ellis has run his own CSR Consultancy, Lorex Ltd, working for charities, government agencies and both large and small companies as well as holding full-time positions at both Lloyds TSB and British Aerospace.
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