The customer is king

March 16, 2006

Briefing comment

The big brand name companies like Nike were the first to take seriously the issues of CSR in the supply chain, driven by the reputational risks. Since the value of these consumer goods companies lies in the buzz around their brands, a juicy bit of scandal could all too easily dent public perception, product sales and shareholder profits.

The latest crop of stories shows things are moving on: it is retailers that are now centre-stage in the ethical procurement debate. With just four chains in the UK controlling 80% of grocery sales, the rules of the game are changing. It’s in the local supermarket where many sustainability issues will be fought out.

However retailers need to worry about more than the individual products they sell – they are brands in their own right. Indeed supermarkets like Waitrose and Marks & Spencer with its Look behind the Label campaign are jostling for pole position as the socially responsible retailer – not just a chain of stores, but the brand of choice for the swelling number of ethically aware consumers, particularly at the top end of the market.

This will have consequences not only for their own behaviour as a business, but also for their own-brand products and the brands they choose to stock. It makes them the centre of attention for government regulators, whether about traditional concerns like competition or new worries about healthy eating. And since supermarkets are the gateway to the consumer for most primary brands, beware the brand that fails to meet ever more stringent sourcing policies of retailers. Until the consumers stop caring that is.

Related news

Sustainable seafood boost

Wal-Mart plans to source all of its wild-caught fresh and frozen fish for the North American market from fisheries certified by the Marine Stewardship Council, it announced on February 3. Since only a small number of fisheries are certified, Wal-Mart says it may take from three to five years to achieve this goal. Environmental organisations Conservation International and WWF will work with Wal-Mart and its suppliers to improve practices in fisheries that do not already meet MSC standards. The company’s initial target is to label the seafood it already sources from MSC fisheries with the MSC logo.

Meanwhile, Wal-Mart’s UK subsidiary Asda has stopped selling four endangered species of fish. The supermarket says it plans to introduce a sustainably sourced “fish of the month”, and that it is reviewing its policy on sourcing marlin and swordfish. Greenpeace continues to campaign against the company, however, saying it has asked Asda to stop selling 14 of the most destructively fished species, and that the company has consistently refused to change its buying policies. Contact Jo Kuper, Greenpeace 07985 605 510; Rupert Howes, MSC 07960 958 139

Green behind the scenes

Marks & Spencer has launched a new advertising campaign, Look behind the label, following research that reveals the growing influence ethical and health considerations have on the purchasing decisions of the public. The campaign communicates the company’s approach to a range of consumer and environmental issues through messages such as: “We’re committed to reducing salt faster than you can say sodium chloride” and “Its not just our green dyes that won’t harm the environment.”

The launch of the campaign coincided with the launch of a range of t-shirts and socks made from Fairtrade cotton, which will be scaled up to include other items of clothing as the capacity of producers of fair trade cotton expands. Nearly a third of respondents to a YouGov poll commissioned by the company said they had decided against buying an item of clothing because of concerns over where it came from, or who made it. Three-fifths (59%) had avoided buying certain foods for the same reason. Around three-quarters (72%) were concerned by the depletion of fish stocks. Contact Rowland Hill, Marks & Spencer 020 8718 6885

in brief

J Sainsbury kicked off sales of Fairtrade flowers in its stores with single roses for Valentine’s Day. The supermarket will also offer bouquets of fairtrade roses throughout the year, sourced from Kenyan farmers. Contact Jo Pinate, Sainsburys 020 7695 3547

Marks & Spencer announced on March 6 that it is converting all 38 lines of tea and coffee sold in its stores to Fairtrade. It is estimated that the move will increase the value of all Fairtrade instant and ground coffee sold in UK supermarkets by a fifth (18%) and increase the value of Fairtrade tea by about a third (30%). Contact Rowland Hill, Marks & Spencer 020 8718 6885

Trainers for the Olympics

Asics, Fila and Puma are among the brands targeted by a campaign to improve labour conditions in the global sportswear industry, before the Beijing Olympic Games in 2008. The Play Fair Alliance, an international network of trades unions, labour rights groups and NGOs, is cajoling the companies to adopt the “Olympic ideals of respect, dignity and fair play”, through a concrete set of proposals, From Athens to Beijing – a Programme of Work for the Sportswear Industry.

An assessment of progress made by the targeted companies and organisations finds that commitment both to the rights to a living wage and to freedom of association and collective bargaining is lacking both in principle and in practice. It also highlights the need for greater cooperation between business and local NGOs and trade unions on the ground. Contact Labour behind the label 01603 666 160

Stitching up fashion

Campaign group Labour Behind the Label has launched Fashioning an Ethical Industry, a programme that focuses on education on social responsibility in fashion colleges across the UK. Katharine Hamnett and Roland Mouret are among the designers and businesses that have pledged their support for the project. Contact FEI 020 7841 8911

Temporary Measures

Defra has agreed to extend the Gangmasters Licensing Scheme to temporary labourers in the food processing and packaging industries as well as agricultural workers, the Financial Times reported on March 2. J Sainsbury, Asda, Tesco, John Lewis Partnership’s Waitrose, the Co-operative Group and the Ethical Trading Initiative are among those who pushed for the development in their responses to a government consultation on the scheme, which closed in December.

Meanwhile an audit commissioned by the Temporary Labour Working Group, an alliance of business and unions aimed at improving labour standards in the food and farming industry, found that nine-tenths of gangmasters supplying casual labour are breaking employment laws to some degree. Of around 200 gangmasters inspected, 164 reports have been processed so far, and confidential interviews with workers, mostly migrants, found 13 cases of bonded or forced labour and 28 cases of illegal employment of children and young workers. Contact Julia Hawkins, ETI 020 7404 1463; Jemima Broadbridge, Defra 020 7238 6092

Corporate Citizenship Briefing Issue 86, Feb/Mar 2006