Numico's Path to Progress in Sustainability
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- Harriet McDowell
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1 Numico's Path to Progress in Sustainability
2 Agenda Numico Ambitions - How We Began Priorities - What We Decided To Do Report 2004/05 - What We Did Realities - What We Learned Report 2005/06 - What We Did Then Structures - What We Are Doing Now New Ambitions - Where We Go Next
3 Strategic Direction since 2002 A high-growth, high-margin, specialised nutrition player
4 Some History 896 Founded in Zoetermeer, the Netherlands as 966 Listed in Amsterdam 98 Acquisition of 995 Acquisition of 997 Royal designation received 998 becomes US Vitamins adventure 2003 Major shift in focus, new Executive Board Specialisation and Focus
5 Trusted Brands - Loyal Customers
6 Leading Baby Food Positions in Europe # Position in Middle East
7 ... And now in Asia-Pacific China /2 Thailand /2 Singapore Malaysia Australia 3 2 Indonesia New Zealand
8 Market leadership positions in general malnutrition, disease-specific and dietetic nutrition, in Europe and internationally
9 Leading positions in Europe and internationally China Argentina 2 Brasil Australia New Zealand 2
10 CSR Ambitions - How We Began? September 2004 (It seems so long ago.)
11 Where was Numico in the world of CSR? 2003: A "Kanshebber" - A Candidate
12 Is Sustainability Just Expensive PR? Promoted in 970s by environmental lobbies Cleaning up 'dirty' industry Morphed 990s into Corporate Social Responsibility (CSR) Human rights, corporate citizenship "People, Profit, Planet" Economic, Environmental, Social Now a mature and self-sustaining industry NGOs, bureaucracies, consultants, accountants Reporting CSR is a costly but necessary exercise for any conscientious European company Can businesses really ignore this movement??
13 Reputation and Risk As a responsible company we set very high standards, and our consumers and other stakeholders expect us to maintain them. These high standards include: Being honest in business Putting our consumers first Showing respect for each other Maintaining a safe workplace Sustaining the environment Above all, a commitment to making safe products for our uniquely vulnerable consumers.
14 Numico's CSR Ambitions From a Standing Start, We Decided To: Close the gap between expectations of outside world and CSR current state, defining CSR targets year by year and reporting on our performance Demonstrate progress and achievements to stakeholders by integrating CSR KPIs into overall performance, and publishing a CSR report based on GRI Be among the high-fliers of CSR within two years, rising above lowly status of flightless AEX 'Ostrich' (Dutch Sustainability Research / Financieele Dagblad, June 3, 2005)
15 So We Looked Around Assessment and Analysis (with our partners DHV): Assess existing CSR profile Locate existing expertise, performance and compatible management structures Identify relevant CSR issues for future policy and KPIs Judge levels of internal support for a CSR programme Determine external CSR requirements (assurance etc)
16 CSR Discovery: What We Found A Solid Foundation CSR practices not new to company (CSR Code of Conduct, health and safety, environmental report 2002) CSR closely linked to core business (appealing to external stakeholders) Broad internal support for CSR (at corporate and local unit level) Many CSR-type initiatives at local unit level Relatively small efforts can leverage large effects Numico's best-in-class Food Safety practices are positive for customer care, environmental performance and third party compliance.
17 Priorities - What We Decided To Do Spring/Summer 2005
18 Priority : A Focussed Strategy Food Safety is our Foundation
19 Priority 2: A Solid Reporting Timetable Timeline Update Code of Conduct Formulate Suppliers code of conduct Define KPIs Develop CSR management structure Formulate CSR targets for 2005 Collect data 2004 Publish qualitative CSR report for 2004/5 Implement Code of Conduct and Suppliers Code of conduct Compose CSR chapter for 2004 annual report Implement CSR management system Implement CSR targets 2005 Evaluate performance 2004 Formulate CSR targets for 2006 Collect quantitative and qualitative data 2005 Evaluate performance 2005 Publish quantitative CSR report for 2005/6 Monitor performance suppliers 2005 Collect data and evaluate performance Publish quantitative CSR report 2006, extended for suppliers, Independent verification
20 Getting Ready Get Ready on Strategy Formulate CSR vision, strategy and policy Formulate focus areas and KPIs Reformulate Employee Code of Conduct and formulate a Suppliers Code of Conduct Get Ready on Reporting Prepare global CSR management system Build reporting team - Food Safety, HR, Procurement, Operations, Marketing
21 Point of No Return: Annual Report 2004 In Annual Report 2004, we promised First Sustainability Report by second half of 2005 Revised Employee Code of Conduct revised new Supplier Code of Conduct Numico Priority KPIs in CSR Worldwide management reporting system Annual ìncremental improvements
22 Report 2004/5: What We Did October 2005
23 Our first (04/05) Report Full 2-year set of environmental, social and environmental data Quantitative data fully aligned with GRI Key supplementary data - product recalls and customer complaints Five focus areas identified Code of Conduct and Suppliers Code of Conduct published in full Report reviewed by outside assurers
24 Core Data and GRI Economic Data from Corporate Finance Social Data collected from HR Worldwide Environmental Data collected from all Supply Points
25 Supplementary Data: First food company to report Product Recalls Data on Carelines and Helplines - Customer complaints Qualitative report on employee engagement Seeds of our future strategy..
26 Five Areas of Focus Healthy Nutrition, Food Safety People & Community Environment Transparency & Good Governance Scattershot Approach
27 Code of Conduct A big step forward
28 People & Community Seeds of a formal Giving strategy
29 Realities: What We Learned January-May 2006
30 04-05 Report assessment What We Learned From Outside: Numico appears on radar for ethical investors (Kempen 'Orange' Fund, SiRi) Numico considered a front-runner in supply chain management Numico placed #2 behind Philips in Dutch VBDO ranking BUT: still lots of holes in our Reporting Profile (Siri/SNS)
31 04-05 Report assessment What We Learned From Inside and from our Partners and Assurers (KPMG Sustainability): Data collection imprecise Project management too informal Reporting is one thing, performance is another BUT: a groundswell of employee sympathy and support
32 04-05 Report assessment What We Learned from our Stakeholders To deliver KPI improvements, stakeholders expect us to have formal, focussed sustainability programmes To develop credibility, we are expected to benchmark against peers, and to expand our stakeholder participation network To demonstrate agility, we should publish basic CSR in April each year, alongside Annual Report First "Stakeholder Meeting" - May 2006
33 Report 2005/6: What We Did Then July 2006
34 Our second (05/06) Report We aligned social and environmental data reporting with our finance reporting system We refined our areas of focus, and outlined our seven key performance measures in 7 key areas We introduced a base level of independent assurance
35 2005/06 Report: upgraded Data Collection Social & Environmental Data collected through our OutlookSoft Finance Reporting System Product Recalls and Customer Complaints collected through our Consumer response systems (CSMS) Targeted audit of data by our partners KPMG
36 Performance: Sustainability at a Glance
37 More Focussed KPIs The Old : 2004/05 Economic: Cost of Goods, Interest Coverage, Donations Environmental: CO2 Footprint, Supply Chain Management, Product Quality Compliance Social: Health & Safety of Employees, Career Development for Employees, Product Labelling for Consumers
38 More Focussed KPIs The New: 2005/2006 Product Quality/Food Safety: Public Recalls*, Customer Complaints* 3rd Party / Supply Chain: Code of Conduct Compliance Environment: Energy Use Impact People: Workplace Safety*, Employee Engagement* Community: Charitable Giving* *Formal improvement programme or tracking method already in place
39 05/06 - other highlights MeyerMonitor employee engagement results published in Report Numico Infant Formula Marketing Guidelines published for the first time (on Numico.com) Transparency works..
40 Structures: What We Are Doing Now November 2006
41 The next step In developing Numico's sustainability profile, we have relied on 'informal' working relationships, with input from Operations, HR, Food Safety, Finance and outside vendors, all co-ordinated through Corp Comms Future progress will depend on a more formal allocation of responsibilities, with real accountability
42 Formal managing structure Separation of 'performance' and 'reporting' Sustainability Steering Committee to set strategy and monitor performance Sustainability programme teams to drive performance Sustainability reporting group to gather bi-annual data and prepare annual reports Sustainability audit team to monitor data compliance (internal audit and external partner And in future.. Formal structure for stakeholder engagement
43 06/07 Report: Our Goal We have promised specific targets and timings against all our seven priority KPIs We have promised to extend the assurance scope of KPMG Sustainability's 'limited assurance' letter We have promised to adopt/align with the new (and more stringent) GRI G3 Guidelines
44 and more Corporate Citizenship Global approach to community support Focused on helping orphanages & most vulnerable children Giving more value to our values Partnership with SOS Children s Villages
45 New Ambitions - Where We Go Now 2007 > 2008 > 2009 >
46 New Ambitions - Where We Go Now A Company's Worth Beyond The Profit Plan.. Recalls and customer Complaints Workplace Safety Employee Engagement Energy use and environment Responsibility in choice of suppliers Community Giving As indicators of the quality of the company, these measures should be part of Numico's Annual Report
47 New Ambitions - Where We Go Now Keeping the CSR Effort Focussed Limit bureaucracy Control costs Benchmark usefully Make assurance count Build a boat, not a supertanker
48 New Ambitions - Where We Go Now Formal partnerships Work with the experts SOS Children's Villages as model Trusted partners for monitoring: human rights child labor environment etc
49 ? Has the Journey Been Worth It? "Some of the numbers in this Sustainability Report are more relevant than the numbers in the Annual Report"
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