With 80,000 employees working in 740 stores in 10 countries globally, home improvement retailer, Kingfisher, faces a broad challenge in meeting its responsibilities – towards its employees, suppliers and its customers.
“It’s all about our relationship with the customer,” says Ray Baker, director of corporate responsibility at Kingfisher since 2004. He goes further to say: “If our customers see that we are not acting on their behalf and we are not buying wood from sustainable forests, or the chemicals in some of the products are not very good, and we are not labelling them very well, or that we are using child labour, they will no longer trust our brand.” Kingfisher brands include B&Q, Screwfix and Trade Depot in the UK, Castorama and Brico Dépôt in Europe and B&Q in China and Taiwan.
Customers and policy
To ensure that its brands are trusted, the most important concern for Kingfisher is to “ensure that each operating company has a programme in place to manage its social and environmental issues and, more importantly, has a system where it is required to achieve certain standards within a certain timescale and to report against this”.
Therefore, in 2005 Kingfisher introduced Steps to Responsible Growth – the corporate responsibility management programme that has to be implemented by all Kingfisher operating companies worldwide.
Steps to Responsible Growth sets out specific actions that all operating companies must take to meet 12 corporate responsibility policy commitments on chemicals, timber, supplier environmental performance, product environmental performance and social impact, energy, transport, product disposal, waste, packaging, factory working conditions, store neighbourhoods, and respect for diversity of people. These are divided into six focus areas – product stewardship, climate change, sustainable operation, supply chain, community investment, and equality and diversity.
In total there are 165 requirements to be met and there are three levels of progress for each issue:
Minimum action – a meaningful start with a commitment to improve;
Policy target – meeting the basic requirements of the policy;
Leadership position – recognised as a leader in action and debate.
All operating companies are expected to reach the minimum action criteria by January 2008, and policy target positions need to be reached by January 2011. Only the newest operating companies – Trade Depot UK, Castorama Russia and Brico Dépôt Spain – have an extra year to achieve the targets “because they have only just come aboard”.
“The whole idea of Steps to Responsible Growth is to allow operating companies to progress in a measured way to achieve policy targets,” Baker explains.
Progress is tracked through an online questionnaire that is completed twice a year. The questionnaire measures progress against the 165 requirements and operating companies can either confirm that an action has been completed (2 points), is in progress (1 point), or has not yet been started (0 points). The results for each company are reported on the Kingfisher website.
The key challenge, Baker believes, is how corporate responsibility is embedded into everyday activities across the group, and he knows that “in this area there are no quick fixes”.
He adds: “Realistically, no company can say that they’ve got it right all the time, no company can say that every piece of their product range is truly sustainable, or that they know everything that is going on in the whole of their supply chain. It’s just impossible to do. All you can do is work in that direction and show evidence of your progress.”
So, Steps to Responsible Growth acts as a tool for Kingfisher to work towards a sustainable future, and allows the company to back up its progress through measurable data. It also ensures that all operating companies are adhering to the same rigorous standards – making it a little bit easier for Kingfisher to control its very large international supply chain.
Management of corporate responsibility
Kingfisher’s chief executive, Gerry Murphy, has overall responsibility for corporate responsibility. He chairs the executive committee, which sets the corporate responsibility strategy and reviews progress of the corporate responsibility programme. This reporting and review takes place twice a year.
The chief executive of each operating company (such as Castorama or B&Q China) is responsible for the implementation of corporate responsibility at their specific company.
There is also a corporate responsibility steering group, which consists of representatives from each operating company, and meets to discuss progress and share best practice.
The corporate centre of Kingfisher – based in Paddington, London – comprises only around 100 employees. The main function of the corporate responsibility team at Kingfisher HQ is to “help, facilitate and guide” the operating companies.
This support and guidance tends to be focused on two big issues – managing Kingfisher’s vast global supply chain and its impact on local communities. According to Baker, partnerships with NGOs and local government authorities are key to effective management.
Partnerships – managing the supply chain
“We know we cannot do it on our own,” Baker explains. “We can’t work in isolation, so we therefore understand that we need to work with governments, NGOs, and with other businesses to achieve our longer term aims.”
He says: “We’ve got a huge supply chain and we know that if products are being made in Europe that’s probably going to be okay. But if we are buying hand-knotted rugs, say 20km north of Dehli, we need to look at that closely as we know that child labour may be taking place, which Kingfisher makes clear is completely unacceptable according to its code of conduct for factory working conditions.”
Kingfisher understands that in some countries children are employed as a result of the working environment of that particular country, and it does not simply cut all ties with suppliers in those areas, as doing so would have its own detrimental effects.
At the same time Kingfisher is also aware of the environmental impacts of its operations. “We think it is unacceptable for a factory to have good working conditions but to be polluting the water in the stream outside the factory.”
Baker explains that in order to check issues such as factory working conditions or environmental management, companies need to partner with NGOs that are based locally as illustrated in the case study below.
Case study: B&Q China and Greenpeace
B&Q China announced in June 2007 that it was coordinating its efforts with Greenpeace to work towards ending the sale of illegal timber in China. Kingfisher and its operating companies aim to sell timber that is only sourced from well-managed forests in an effort to move the market for timber towards more sustainable and renewable sources. This approach was started by B&Q in the UK in 1990.
Baker explains that Kingfisher would rather work with NGOs than against them: “Either we can say that we will go away and look at the issue, and probably put our heads under a blanket, or we can talk about it with Greenpeace because they know it is a problem not easily resolved, and we know it is a problem not easily resolved, because most of the timber sold in China is sold through street markets.”
Partnerships – working in the local community
Kingfisher aims to make each of its stores “a good neighbour in the community it serves”. The company contributed almost £1.3m to the community in 2006 of which 50 per cent was in-kind giving.
An important element of this commitment is to deliver community investment programmes. One recent example of a community partnership is that between B&Q China and Save the Children.
Case study: Kingfisher, B&Q China and Save the Children
Kingfisher and B&Q China fund a project – called the Youth Justice Project – that aims to divert vulnerable young people, who have already committed petty crime, from the larger “conveyor belt” towards organised crime. This is done by providing Community Activity Centres in their local communities. The activity centres provide these young people with a place to go after school where they can learn and play, and further protects them from inappropriate or harsh punishments for petty crime. The activity centres are staffed by Save the Children volunteers.
Employees
Baker has found that the best way to build and communicate corporate responsibility programmes, and to mobilise partnerships, is through the people employed by Kingfisher and its group of companies.
To do this, Kingfisher is establishing an internal corporate responsibility communications campaign. Baker stresses that “internal communication and employee relationships in terms of social and environmental issues are becoming more and more important”.
Employees are also significant when implementing the policies set out in Steps to Sustainable Growth and Kingfisher works closely with its operating companies to provide guidance and support on these requirements. The company runs workshops and training courses for employees in issues such as chemicals, timber and factory working conditions.
The annual corporate responsibility report is another way of communicating Kingfisher’s aims and progress to all stakeholders, including employees.
Reporting on progress
Kingfisher’s corporate responsibility report is online with a summary report available to print. Baker envisions an interactive reporting structure in the future – one that will allow stakeholders and customers to contribute and ask questions. Baker hopes that this will make the corporate responsibility report a “living document”.
Further to its report, Kingfisher is also a member of many stakeholder organisations, including Business in the Community, the Corporate Leaders Group on Climate Change, the CSR Committee of EuroCommerce, the European DIY Retail Association, the British Retail Consortium and many more. All these organisations expect the company to report on progress and to be honest and transparent, Baker points out.
Looking forward
Baker’s philosophy with regard to social and environmental issues is that “you need to be a pragmatist and a visionary – both as an individual and as a business”.
He explains that pragmatism involves the implementation of Steps to Responsible Growth, how it progresses, and how it is measured and acted upon.
The visionary side – and just as important – involves looking towards the future “in terms of energy usage, transport, the way people will be living and their expectations in areas such as health and so forth”.
For this reason, Kingfisher is collaborating with Forum for the Future to encourage debate at board level and to develop a sustainability strategy for the next decade – scenario planning, which will aid the development of future corporate responsibility programmes at the company.
Refreshingly honest, Baker acknowledges that “we really don’t have all the answers. We don’t get it right all the time and we know we are not unique in what we do”. However, he adds that Kingfisher wants “to
be open and honest and transparent so at least we can say – this is what we are doing, this is what we are not doing, and this is what we are trying to do to achieve our goals”.
Biography
Ray Baker, Director of Corporate Responsibility
Ray Baker was appointed director of corporate responsibility for Kingfisher plc in October 2004. He is accountable for developing the group’s global environmental, diversity, ethical and community policies and programmes.
He is a member of the Cambridge University Business in the Environment Programme and represents Kingfisher on the BEP Climate Change Group and the Business in the Community Marketplace Impact Taskforce working group. Ray is chair to both the EuroCommerce and British Retail Consortium policy advisory groups on corporate responsibility and was a member of the European Multi Stakeholder Forum on CSR.
COMMENTS