Slower fast food, CFOs engaged and a chickpea bonanza
Fast food chain’s sustainable food foundation
US restaurant chain Chipotle Mexican Grill is putting its money where its sustainable food practices are with the new Chipotle Cultivate Foundation to raise awareness about and support sustainable agriculture and healthier food choices.
Chipotle has quickly grown from one store in 1993 to a global chain with more than 1,000 locations and a mission to support and sell “Food with Integrity” by using natural ingredients, organic wherever possible, and primarily naturally raised and hormone-free meat.
The foundation will support family farmers and their communities, as well as educators and programmes dedicated to promoting sustainable practices.
Chipotle has donated more than $2m in the past two years to philanthropic organisations including the Nature Conservancy, Jamie Oliver’s Food Revolution and the Lunch Box.
“Delicious, affordable food can be produced without exploiting the farmers, the animals or the environment,” says Steve Ells, chairman of the Chipotle Cultivate Foundation. “Chipotle has proven this to be true, but Chipotle is only one small part of the solution. Our goal now should be to have all food produced as sustainably as possible.”
H&M joins Fair Wage Network
Swedish fashion retailer H&M has joined the Fair Wage Network (FWN), a group of fashion brands, clothing producers, NGOs, and labour unions to promote improved wage practices in the global garment industry.
Currently, H&M suppliers must abide by the company’s code of conduct, which mandates just treatment of employees, including fair wages, and regularly audits its suppliers to ensure compliance.
The Fair Labour Association (FLA), a co-founder of FWN, will step in where H&M’s audits leave off and conduct an independent assessment of the wage structures in several of H&M’s key production markets, starting with 200 supplier factories in China, India, Cambodia and Bangladesh, representing half of H&M’s global production.
According to Helena Helmersson, head of CSR at H&M, the FLA’s audits will serve as the foundation for new strategies and “provide clear and practical guidelines as to how H&M, together with other brands and other relevant stakeholders, can remediate wage structures in a sustainable way where needed”.
Finance chiefs’ evolving role in sustainability
While chief financial officers are engaging in their companies’ sustainability efforts, there is still substantial room for improvement.
That is a central finding of Deloitte’s new report, Sustainable Finance: The risks and opportunities that (some) CFOs are overlooking, which surveyed 208 CFOs at large corporations (annual revenue of more than $2bn) in 10 countries.
The good news is that more than 70% of CFOs surveyed say they expect sustainability to have an impact on compliance and risk management, and more than 60% believe sustainability will affect core business functions such as financial auditing and reporting. And CFOs are willing to invest: nearly half are planning to allocate money to new technology to reduce carbon emissions and increase energy efficiency.
But where many CFOs lag behind is their lack of full understanding of sustainability’s impact across all business areas. For example, two-thirds of CFOs see a weak correlation between sustainability strategy and business performance, and only 29% say mergers and acquisitions activities would be affected by sustainability.
It should be noted that the CFOs’ approach to sustainability differed dramatically by country and industry sector. For example, in South Africa half of CFOs said they were “fully involved” in their companies’ sustainability strategy, while in China none did. Likewise, CFOs operating in the auto industry saw a weak link between sustainability and performance, while those in the basic materials sector said the link was strong.
Overall, the report recommends that CFOs start incorporating a “sustainability dimension” into their daily activities, including resource management, compliance, and performance measurement and reporting of both financial and non-financial indicators.
“The vantage point that CFOs enjoy within organisations, with visibility onto balance sheets, corporate transactions, and the entire business, means that they are positioned to shape strategy while carrying out core financial functions,” the report states. “In our view, CFOs will come increasingly to recognise the relevance of sustainability initiatives to their portfolio of responsibilities, and they will seek a greater role in driving those initiatives.”
McDonald’s sells certified fish
Starting last month, McDonald’s is now selling Marine Stewardship Council (MSC) certified sustainable Filet-o-Fish sandwiches in more than 7,000 restaurants across 39 European countries.
According to the UN’s Food and Agriculture Organisation, 70% of global fisheries are exploited, meaning they are being harvested faster than fish can reproduce.
McDonald’s move therefore comes not a moment too soon, and will have a significant impact on the seafood market. “We know, from the increased queries and accelerating commitments to certify outlets, that other food service companies, supplying both high street and institutional restaurants, have sat up and taken notice,” says MSC spokeswoman Kate Wilcox. “For fisheries that have made the investment in certification, that’s a great reward for their investment: it helps stabilise their business in uncertain times when they know they can get the contracts they’re looking for.”
The fish sandwich packaging will also carry the MSC logo, in an effort to share the news with customers. Last year, McDonald’s sold about 100m Filet-o-Fish portions in Europe alone.
Maltesers go Fairtrade
Maltesers are to be Mars Chocolate’s first Fairtrade certified product.
The confectionery giant is already using Rainforest Alliance certification on the cocoa used in its Galaxy chocolate – the company’s largest UK brand – and has worked with UTZ, which certified the cocoa used in its German Balisto line last summer. A switch to Fairtrade by Maltesers, which is Mars’s second biggest UK brand, was the next clear choice, and the best way to deliver the greatest impact for cocoa farmers in west Africa.
According to Lee Andrews, Mars Chocolate’s corporate affairs director, when Fairtrade Maltesers hit UK shelves in 2012 about 25% of the company’s UK products will be certified (either by the Rainforest Alliance or Fairtrade). On a global scale, at the close of 2010 5% of Mars’s cocoa was certified, so the company will need to continue working hard to meet its goal of sourcing 100% sustainable cocoa by 2020.
“It is clear to us that we will have to work with a range of certifiers if we are to meet our 2020 commitment, as any individual body will not have the capacity and infrastructure to supply the cocoa we need,” Andrews says. “The most important factor for Mars when entering into agreements with external bodies is that they share our commitment to working together with cocoa farmers and other agencies towards the long-term sustainability of cocoa growing communities.”
The Fairtrade partnership was announced the same week as Mars launched its new mars.com website and Principles in Action, which for the first time publicly disclosed the company’s sourcing and environmental commitments, targets, and progress thus far.
Andrews says: “Our aim is to source more sustainable raw materials, to increase incomes and create mutual benefits for the communities that produce these raw materials. The commitment to 100% certified sustainable cocoa is just one of a range of sustainable sourcing commitments we have made across our supply chain and is in addition to a programme to ensure that our operations are ‘sustainable in a generation’.”
PepsiCo hearts chickpeas
PepsiCohas teamed up with the UN World Food Programme (WFP) and United States Agency for International Development (USAID) to boost chickpea production and help tackle child malnutrition in Ethiopia.
The two-year initiative, Enterprise EthioPea, was envisaged by Ethiopian prime minister Meles Zenawi, who saw a social and economic opportunity through a public-private partnership to support the use of local crops to address the country’s acute nutritional problems, while building new domestic and export markets for Ethiopian chickpeas.
More than 13 million people suffer from malnutrition in the Horn of Africa, yet Ethiopia is the world’s sixth largest producer of the nutritious chickpea. EthioPea will use the country’s domestic crop and harness the agricultural expertise of USAID and PepsiCo to create a nourishing ready-to-eat chickpea paste to address malnutrition. The aim is to reach 40,000 Ethiopian children in two years, and the WFP will use its vast operational network to distribute the supplement to those in need.
Naturally, there is an underlying business interest in chickpeas for PepsiCo. According to PepsiCo’s Derek Yach, senior vice-president for global health and agriculture policy, the company is dedicated to “performance with purpose”, whereby its financial success must go hand-in-hand with social and environmental responsibilities.
So while PepsiCo is using chickpeas to address malnourishment in Ethiopia and stimulate the country’s economic growth, EthioPea is also helping to secure a critical raw commodity for PepsiCo’s burgeoning dips and spreads business. In fact, PepsiCo is aiming to more than double revenues from healthy foods and drinks from $13bn today to $30bn by 2020, and it expects to source at least 10% of its supplies from, you guessed it, Ethiopia.
“For PepsiCo, Enterprise EthioPea is not really about ‘CSR’,” says Yach. “It’s a smart way to support our business goals, while also doing good for people with real, long-term needs.”