The news that the iconic Kit-Kat, on our shelves since before the Second World War, is to be certified Fairtrade has made headline news. Surely a positive step forwards by Nestlé who are taking responsibility for the welfare of their cocoa farmers on the Ivory Coast? But it doesn’t seem to be placating a raft of campaigners who are concerned that the issue of child labour is raising its ugly head again. So can companies ever really hope to win, or will they always be shot down by some group or another?
Negative stories following the Kit-Kat announcement are of no real surprise. Brands making sustainability claims in mainstream marketing are easy targets. Think Dove’s Campaign for Real Beauty, and Greenpeace’s direct riposte in highlighting Unilever’s destruction of the Indonesian forest in the production of palm oil for Dove products. With trust in business rock bottom on the back of the economic crisis, and the onset of climate change top of the global agenda, brands are increasingly going to be making bold claims and using ethical messaging to connect with consumers, who are beginning to make purchases based more on values rather than purely value.
The beer sector is an interesting example. With a predominately young, male consumer base, one would not have thought of beer brands being among the first to be active in this area. However, in the last year Stella has run the ‘Recyclage De Luxe’ and ‘Hedge Fund’ campaigns, putting environment messages at the forefront of its marketing. Carling has gone down the local sourcing route through its ‘100% British Barley’ ads, whilst Becks have run the ‘Love Music, Hate Racism’ campaign on its labels.
On the one hand, it is great that environmental and social credentials are becoming so sought after by companies. However, on the other hand, bolder claims present greater potential risks. There are always going to be journalists and NGOs sharpening their knives ready to attack. It is therefore vital that companies check whether they have any skeletons in the closet, assessing key issues right across their value chain, before putting their heads above the parapet. Only then will they be in a position to easily bat away the anti-corporate brigade.
Chad is a consultant at Corporate Citizenship.
Email him at chad.rogerson@corporate-citizenship.com to discuss assurance, community, impacts, new business, stakeholder engagement and strategy development.
Have a break, have a Fairtrade Kit Kat
Nestlé UK announced on December 4 that Kit Kat would be certified Fairtrade in the UK and Ireland. Fairtrade certification of Kit Kat will aim to facilitate long term direct commitments to cocoa co-operatives including additional payments for the farmers to invest in community or business development projects of their own choice, such as improving healthcare and schools. In response to the announcement, Boycott Nestle, the campaigning blog asserted that the good news was only partial, as the Fairrade mark would only apply to Nestlé’s four fingered Kit-Kat. Mike Brady, Campaigns and Networking Coordinator at Baby Milk Action, said: ‘Nestlé is already using a Fairtrade mark on a token product representing just 0.02% of its coffee purchase to try to divert criticism of its trading practices which have been blamed for driving down prices for millions of coffee farmers.’
Survey shows disconnect between the strategic value and measurement of sustainability initiatives
A survey release on December 8 of corporate sustainability leaders shows that while sustainability initiatives are seen as having significant strategic value to organizations, reporting on these initiatives is challenging. The survey found that 72% of respondents believed that boards of directors place a high priority on sustainability and 74% say their organizations link their sustainability initiatives to company strategy. However, more than half of the respondents also said they thought measurement for the initiatives was lacking. The findings are based on a survey co-sponsored by Crowe Horwath, and the Center for Business Excellence (CBE) at MiamiUniversity’s Farmer School of Business. Of the survey’s 178 respondents, 40 percent had annual revenues above $1 billion, while 60 percent were below $1 billion.
One in six managers see climate change as priority
Most managers recognise climate change as an important issue for business but fail to do anything about it. This is the key finding of an extensive survey conducted by trade body the Chartered Management Institute (CMI). The report, called ‘Lean and Green’ and released on December 2, suggests that the number of managers who plan to make climate change a priority in 2010 is just shy of one in six (16%). The CMI findings also confirm that young, junior managers are more enthusiastic about tackling climate change while those at the top are less anxious to embrace the opportunities and challenges in this area, with just over half (54%) of directors identified as ‘climate change cynics’. To encourage managers to take up the low carbon challenge, CMI is calling for all UK organisations to have a green team in place and active, by 5 June 2010 – World Environment Day.
Number of S&P 100 firms producing sustainability reports jumps by a third
The number of S&P 100 companies producing sustainability reports with performance data jumped by more than a third in the past year, according to a new report, released on December 17 from the Sustainable Investment Research Analyst Network (SIRAN), a working group of the Social Investment Forum (SIF). Furthermore, 93 of the S&P 100 now provide at least some sustainability information on their web sites. ‘For most of the past five years, in addition to sustainability reports, we have also seen a gradual increase in the number of companies adopting the Global Reporting Initiative (GRI) reporting framework,’ said Sharon Squillace, RiskMetrics’ Research Analyst and Manager of the S&P 100 Project. “Last year, however, the number of companies referencing GRI in their reporting jumped by an impressive 25%.”
More than eight out of ten grocery suppliers step up investment in sustainability
New research, released on December 2 from IGD, reveals that 85% of grocery and food manufacturers have either stepped up their investment in sustainability, or kept it the same during the recession, despite just over two-fifths (42%) believing it is not yet high enough on the shopper agenda. Three-quarters (76%) of suppliers think that sustainability will play a greater role in their trading relationships with retailers in the near future, but just over 40% view increased global competition for resource (41%) and more complex legislation (40%) as two of the biggest threats to wider business sustainability in 2010 and beyond
The business response to climate change is described as “timid” and “sleepy” by two of six expert commentators interviewed for a new report from ACCA (the Association of Chartered Certified Accountants) and GRI (Global Reporting Initiative), published on December 7. The report, called ‘Getting It: Expert Perspectives on the Corporate Response to Climate Change’, interviewed six business and sustainability experts about the climate change and business debate, including Professor Mervyn King, Chair of GRI’s board, Paul Dickinson, CEO of the Carbon Disclosure Project and Martin Hiller, Climate Change Communications Manager for WWF. Comments included the belief that a collective failure to ‘get’ climate change is likely to mean the end of the world as we know it today. However, Paul Dickinson is optimistic that business – after a slow start – will ‘get it’ in time. Lord Turner, Chair of the UK’s Committee on Climate Change and Chair of the Financial Services Authority (FSA), calls for a clear legal framework within which developed countries commit to strengthening their reduction targets, saying this is the foundation stone for an effective global response to the challenges presented by climate change. Contact: Global Reporting Initiative
Ernst & Young report on SABMiller’s contributions to the European economy
An Ernst and Young study, released on December 21, has reviewed SABMiller’s economic, regional and social impact in Europe. The work looked at the impact of the production and sale of SABMiller‘s beers in Russia and the nine EU countries where it operates.The Ernst and Young report has found that for every person employed at the 23 European SABMiller breweries, an additional 15 jobs are generated in other industries including agriculture, transport, retail and advertising. In total this means that nearly a quarter of a million jobs are directly or indirectly related to the production and sale of SABMiller’s beers. The company’s breweries in Europe sold approximately 45 million hectolitres of beer in 2008 – the equivalent of nearly eight billion pints. In turn these generated 3.83 billion Euros in government revenues from sources such as excise, VAT, social security contributions and personal income taxes paid by both SABMiller and supply chain employees.
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