The developing agenda of retail sustainability

Transcription

1 The developing agenda of retail sustainability Brian Smith, Data Director, 18 November 2015

2 Content Introduction Setting the scene Mintec sustainability survey Stages in sustainability management Outlook and benefits of the retail sustainability agenda

3 Mintec Founded in 1982 Family owned, UK based, Global client base We provide commodity/raw materials price data, trends & market intelligence Core client base Procurement professionals Food manufacturer Retail & wholesale Food services

4 Raw material markets and categories covered Grains & cereals Dairy & eggs Textiles Economic data & currencies Transport, freight & shipping Plastics Fruit, nuts & vegetables Over 22,000 individual series Tea, coffee, sugar & cocoa Wood Fish & seafood Oils & fats Metals Ingredients Meat & livestock Herbs & spices Pulp and paper Energy & fuels PMI CPI, RPI

5 Brian Smith Qualifications; - MBA in Retailing - BSc (Hons) in Biochemistry - Diplomas in Health & Safety & Food Hygiene Experience; Over 25 years commercial and operational experience - Food: producer, manufacturer, wholesale, retail & service industries - Domestic, duty free/travel retail & international markets - Supplier & category management (procurement & trading) - Supply chain & stock management (value chain) - Strategic business development and turnaround (operational excellence) - Brand & trade marketing (vision & value) - Previously a client of Mintec

6 Why is sustainability important?

7 The challenge facing the planet Population Water Food Prices Half Growth forecast global > 1.2 Degrading 200 billion chemicals live faster in to in population acceleration than increase live our blood/urine replenished by on water scarce (now coastal 100% > by 7 regions billion) areas 2030 Climate Ecosystem Pollution

8 Factors influencing the retail sustainability agenda C-suite buy in Sustainable sources Globalisation Consumers Capital investors Carbon emissions Reduction of waste Energy management Regulations Education of buyers

9 The push/pull factors facing retailers Political movement Society T.S.C. C.D.P. BRC FDF Regulation Waste S.A.C. RILA CSR polices F.S.C. CIPS Animal welfare Knowledge Carbon Trust M.S.C. PRSM IGD

10 How to consider the retail sustainability agenda Environment Planet Society People Economy Prosperity This is sustainability

11 Mintec sustainability survey Survey Detail Sample size Results 75 respondents (relatively small sample) Locations 52% Europe, 21% Asia, 18% Africa, 9% North America Value > 500 billion represented by respondents Sustainability budget Only 15% had a specified budget, 45% had none Responsibility for sustainability 30% MD/Directors, 30% defined department 15% procurement, 12% unknown, 12% none

12 What does sustainability mean? Causing little or no damage to the environment and therefore able to continue for a long time Cambridge Dictionaries Online 2015

13 What does sustainability mean? Ability to stay afloat in the Private Sector Its when you let mother nature do its job without adding chemicals All kind of growth need to be based on both social and environmental aspects Living and working in a way that does least harm to the planet Ability to feed people into the future Long term solution of way of working according to fulfilling laws and requirements, and support increasing customer requirements Sustainability works at multiple levels 1) Corporate 2) Product 3) Personal Protecting resources in a way that will not die on mankind

14 How to consider the retail sustainability agenda Environment Planet Society People Economy Prosperity This is sustainability

15 What does sustainability mean? All considerations and actions have a neutral or positive impact on the environment of the planet and promotes the health and wellbeing of all living inhabitants Brian Smith Data Director Mintec, 2015

16 What sustainability trends are you aware of? Water use and availability Ethical sourcing Recycling Clean energy Solar energy Green corporate culture Animal welfare Food policy and regulations Cocoa, fish and palm oil Pole and line fishing Consumer awareness of raw materials Food waste Human rights Focus on carbon, water and energy Social..Ethics..Environment..and more..

17 Concept of T.A.S.K. T A S K Traceability An auditable management system for raw materials, products and services that is visible and can be tracked from ground, to harvest, through all aspects of the supply chain (including manufacture) to the shelf or end consumer/client Accreditation Recognition of appropriate and independent auditable standards or membership through a quality certification that guarantees the required specification of a raw material, product or service from a source or supplier e.g. BRC, ISO, Red Tractor, efsis Social topics Ethical practices and cultural environments that are, at a macro geo-political level and, at a micro company/organisation level. These include: Employee satisfaction, equal opportunities, general health & safety, community involvement, human rights, supplier relations, child labour, corruption, fair trade, carbon emissions Knowledge Market insights in relation to Political, Environmental, Economical, Legislation and Fundamentals (production, consumption, trade, stock levels) of a raw material or service area that supports the actions required to keep such areas sustainable

18 Major considerations within your sustainability agenda % of Respondents Traceability Accreditation Social Topics Knowledge Strongly Agree Agree Neither Disagree Strongly Disagree

19 Importance rating of T.A.S.K. 60% 50% 40% % of Respondents 30% 20% Traceability Accreditation Social Topics Knowledge 10% 0% Importance Rating (5 = very important, 1 = not important)

20 Top 3 issues blocking the retail sustainability agenda Cost Complexity Climate

21 Importance of sustainability over next 5 years 36% 36% 27% 0% Much more Setting the benchmark as market leader Consumer and employee driven topic It is the global trend, legislation and a source of competitive advantage More Customer, governmental and environmental requirements increasing More people, scarcer resources An important component of risk management and continuity of supply Static We already consider sustainability important for our future Simply because most rules are already set and fixed Such issues will continue to be major factors in our planning Less Much less

22 Stages in sustainability management Early Focus on internal operations and compliance Departmentally driven May have 1 or 2 dedicated people Development Wider supply chain compliance and local community support Has corporate buy in May have director owning area Will have defined sustainability roles Consumer support Mature Opportunity to business, environment and all communities Integrated into vision, values and strategy Driven and led by CEO/MD Outwith defined roles all employees responsible Community engagement

23 The time to develop the retail sustainability agenda Team engagement Top down Integrated strategy Community connection Robust system Green transportation Smart energy Build Driven Built appropriate into from and Working Full programme Develop Education Help Company Renewable Reduced in the very plays system partnerships of top, a embraced pivotal for: positive close Innovate, the of community, values consumers, miles, supply, and with by role measurement, aligned engagement the loop lower ethics charity hub/spoke, case energy recycle, translate assistance, sizes, lighting, into all in employees business values natural and green communication products reduced proud, shared innovative management and and disaster use strategy services goals packaging engaged loads, less appeals and building drop employees off design points commitment Supply chain collaboration Consumer engagement Reduce waste Sustainable packaging Green products

24 Maturity in retail sustainability management Team engagement Top down Integrated strategy Community connection Robust system Green transportation Supply chain collaboration Smart energy Consumer engagement Reduce waste Sustainable packaging Green products

25 Walmart Lee Scott, CEO in 2005 was engaged, involved and in touch Lee set the tone with 3 aspirational goals - be supplied with 100% renewable energy - to create zero waste - to sell products that sustain people and the environment Creation of The sustainability index - cross functional collaboration including NGO s and TSC - evaluation now covers >65% of all goods sold in Walmart Walmart s sustainability agenda falls under 3 pillars: - Opportunity : increase economic opportunity (prosperity) - Sustainability: deliver low true cost (planet) - Community : strengthen local communities (people)

26 Unilever Vision: To double the size of business (prosperity) Increase our positive social impact (people) Reduce our environmental footprint (planet) Unilever: sustainable living plan Growth Impact Social Impact Business Environment Footprint Time

27 Macro trends Cross sector collaboration on sustainability goals Developing sustainability into a business growth opportunity (and not a cost to reduce risk) Developing systems for continuous improvement Fostering transparency in operations and throughout the supply chain

28 Future outlook Sustainability integrated and pivotal in business strategy Transformation in retailer-supplier relationships Industry collaboration becomes the standard Business models and consumer communications will evolve Community engagement and NGO consultation will be the norm All considerations will take into account the 3 P s of sustainability T.A.S.K. can be an approach to adopt as part of the retail sustainability agenda

29 The benefits of the retail sustainability agenda More efficient business model Proactive mitigations of real business risks Drives new innovations and NPD Recruitment and retention of top talent Entry into new regions and markets Improved reputation with industry stakeholders and consumers

30 Thank you for listening Come see us on stand 134