Corporate Social Responsibility programs continue to grow in importance
Companies continue to explore new ways to be socially responsible
Miriam Maxwell of Ocean Spray knows firsthand how tricky corporate social responsibility can be.
As the company’s senior principal regulatory scientist for corporate scientific and regulatory affairs, she is on the frontlines of managing the cranberry processor’s efforts. And when it comes to things like GMOs, getting rid of them can often clash with other initiatives, like reducing fuel consumption.
That’s because the challenges associated with sourcing non-GMO sugar often means the suppliers are farther away, which means longer shipping distances that increase trucking and fuel costs.
“On the one hand, consumers are all talking about sustainability, and on the other, they are getting from the media that they want all these non-GM ingredients,” she said during the recent Food Sure conference in Chicago. “Also, the price of the product goes up, [and] I think it’s a big challenge when we talk about sustainability and good nutrition for all.”
Ocean Spray is just one of the many companies struggling to find the right balance when it comes to corporate social responsibility (CSR) efforts. And the stakes have never been higher, as consumers are becoming more aware of where their food comes from and then turning to social media to hold manufacturers accountable.
There seems to be some confusion surrounding what exactly it means to be socially responsible, as that definition is evolving.
As a 2017 Cone Communications CSR study stated, “Although CSR will always be grounded in business operations—from water conservation to supply chain transparency—recently, the stakes have gotten a lot higher. Companies must now share not only what they stand for, but what they stand up for.”
The study found the importance of companies’ involvement in three key CSR areas:
- Companies taking the lead: About two-thirds (63 percent) of Americans are hopeful businesses will take the lead to drive social and environmental change moving forward, in the absence of government regulation.
- Social justice: 78 percent want companies to address important social justice issues.
- Beliefs: 87 percent will purchase a product because a company advocated for an issue they cared about, and 76 percent will refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs.
It’s a lesson that TV host Laura Ingraham recently learned the hard way. After she sent a disparaging Tweet about David Hogg—one of the students who survived the Parkland shooting in Florida—he took to Twitter to name her top advertisers and asked them to stop supporting her show. Within days, pet food company Nutrish said it would no longer advertise on her show, and it was quickly followed by TripAdvisor, Wayfair, Expedia and Nestlé.
Nestlé replied to a consumer asking about the company’s ads on the program by simply saying, “Hey, thanks for letting us know how you feel … we have no plans to buy ads on the show in the future.”
The Cone Communications report showed consumers are increasingly concerned about CSR issues. In the year prior to the study, 55 percent of consumers bought a product with a social/environmental benefit, 52 percent bought a product/service because that company supported or advocated for an issue they cared about, and 45 percent told friends or family about a company’s corporate responsibility efforts.
“Consumers are becoming more and more educated, and as consumers realize the way some food is produced causes environmental damage or causes human suffering, that’s something they don’t want in their food,” explains Irit Tamir, director of Oxfam America’s private sector department.
The organization, which works to fight international poverty, launched a Behind the Brands campaign back in 2013 that focused on the top 10 food and beverage companies in the world. The goal was to hold them responsible for their agriculture supply chains. And as Tamir tells it, the campaign was a success.
For example, Oxfam highlighted land issues related to sugar crops and the need to respect communities when corporations purchase land, which resulted in both Coke and Pepsi pledging to improve their purchasing processes.
The campaign also highlighted climate change, leading General Mills and Kellogg’s to make commitments to reduce their environmental impact.
And its focus on women involved in the cocoa supply chain resulted in Nestlé, Mondelez and Mars all making commitments around the issues women face.
“We saw these companies really step up and take leadership in these various issues,” Tamir says.
And now, she says Oxfam has dialed back the public campaign and is instead working to hold the companies accountable for their commitments—many of which featured major benchmarks for 2020.
“We don’t think of social responsibility as adjacent [to corporate activities], but actually, it needs to be incorporated in their core business practices,” Tamir says. “As company policies drive how food is produced, social responsibility can combat things like climate change, and consumers are paying more and more attention. We don’t see it as something that sits on the side of the company.”
Campbell’s is an example of one food company that is increasing the importance of its CSR efforts.
“Campbell’s sustainability strategy is integrated right into its corporate growth strategy,” says Megan Maltenfort, senior manager, CSR, Campbell Soup Company. “We know that our efforts in this space are important to each of our diverse stakeholder groups. Corporate responsibility efforts attract top talent, engage employees and instill pride, build stronger customer partnerships, enable better connections with consumers, manage supply chain risks and allow for transparent conversations with investors. It’s not just the right thing to do; it’s good business.”
The company focuses on four key areas: how Campbell’s food is grown, sourced, produced and shared.
“We are working with farmers to reduce resource consumption on farms, optimize pesticide and fertilizer use and invest in agricultural innovations,” says Maltenfort. “From farm to fork, Campbell is building mechanisms for transparency and traceability to ensure ethical and sustainable practices along our entire supply chain. We have also made commitments to reduce greenhouse gas emissions, water use, waste to landfill and food waste generation in our own operations. Finally, Campbell is committed to building trust with stakeholders through transparency and our Real Food Philosophy.”
Mars is another company that’s taken a multifaceted approach.
“Mars, Inc.’s goal is to leverage our business to create long-term social impact, minimize our environmental influence and create economic value for communities worldwide,” says Alicia A. Buksar, senior external affairs manager at Mars.
Last year, the company announced a $1 billion investment in its Sustainable in a Generation plan, which focuses on three areas: a healthy planet, thriving people and nourishing wellbeing. In this effort, Mars outlines strategies for tackling global threats, including climate change, poverty in supply chains and scarcity of resources. Specifically, the company is looking to reduce GHG emissions across its value chain by 27 percent by 2025 and 67 percent by 2050 to help keep the planet from warming beyond two degrees.
The company also wants to “ensure that everyone within our extended supply chains earns a sufficient income to maintain a decent standard of living and that everyone touched by our business is treated with fairness, dignity and respect,” Buksar explains.
And Mars, Inc. is advancing R&D and collaboration to improve food safety and security.
“For Mars Wrigley Confectionery, this entails making, marketing and labeling our products to help consumers limit [their] intake of sugar and trans fats, while still providing a tasty treat,” Buksar says.
Additionally, for the fourth year in a row, M&M’s brand is partnering with Red Nose Day to help America come together to help end child poverty, donating more $1 million to the Red Nose Day Fund.
“We’re very proud to be involved. In fact, Mars Global and Maltesers have been involved in Red Nose Day in the UK since 2011 and raised more than £2 million,” Buksar says. “We’re looking forward to raising awareness in the US and making a difference in our own uniquely fun and colorful way.”
But all those projects aren’t free, and that can mean increasing prices for consumers.
“Our research [at Campbell’s] shows that there is a segment of consumers for whom it is really important to understand where and how their food was made, and they’re willing to pay a premium for products created in a socially responsible way,” Maltenfort says. “We see more Millennials in this group but not exclusively. For example, some of the parents of those Millennials are being influenced by their kids and also thinking more about how and where their food comes from.”
Mars also says consumers are willing to spend more on socially responsible products.
“In our experience, consumers expect businesses to have a positive impact,” says Buksar. “The data supports that consumers reward brands for this behavior.”
Specifically, Mars points to Nielsen data that reports that two-third of consumers are willing to pay extra for products or services from companies committed to a positive social and environmental impact.
“We believe that the more people know about sustainability and socially responsible business, the more positive change will happen,” says Buksar.
Oxfam also has a new focus for companies that it hopes will help with the increased prices for consumers—what it calls the issue of inequality in value chains, specifically, the fact that many farmers are making so little money, while CEOs and shareholders continue to get higher pay and dividends. And they are planning to release research in the next few months highlighting this issue.
“It’s going to come down now to helping to make these value chains more equal and making them work more for those who actually grow and process of our food,” Tamir says. “We need to be more mindful of those people in the value chains.”
She argues that companies that pay CEOs and shareholders less can often incorporate more socially responsible programs without having to increase prices. And those programs can impact a lot of lives.
“Companies, more broadly, have really begun to start thinking about all the stakeholders that are impacted by their company and that includes a much bigger sphere of influence,” Tamir explains. “Usually, it’s shareholders and consumers, but they really need to be thinking about the broad range of stakeholders, and that’s going to mean the workers in their supply chain, the farmers [and] communities.”
It can be difficult for companies making a finished product to really monitor their entire supply chain though.
“Obviously, traceability is key: it’s hard to support suppliers if you don’t even know who they are,” Tamir says. “Many of [the companies] will ask, ‘Is it better to go wide and shallow or narrow and deep?’ Starting with narrow and deep … is probably the way that you’re going to tackle these issues.”
She says that for most companies, going shallow means they’re really only hitting at the trader level, but a narrow focus can mean helping farmers dealing with poverty. However, Tamir acknowledges that going back into the supply chain can be a challenge, but she says new tools like blockchain are making it easier to do.
It does also mean working with suppliers. For example, the Mondi Group, which is a packaging and paper company, has its own CSR programs.
“Our Growing Responsibly model covers 10 action areas, which reflect those aspects of sustainability that are most relevant for Mondi and our stakeholders,” explains John Lindahl, technical director, Mondi Group. “Within these action areas, we have made 16 public commitments, which we aim to achieve by 2020, along with a carbon emission commitment, which runs to 2030.”
The company says it takes CSR seriously.
“We operate in a rapidly changing world. With diverse and complex issues impacting society, the planet and business, we must find effective ways to achieve sustainable economic growth and support livelihoods in ways our planet can support,” says Lindahl. “Our Growing Responsibly model is the framework we use to respond to sustainability challenges and opportunities. As one of Mondi Group’s strategic value drivers, Growing Responsibly shapes our long-term response to sustainability issues and enables us to demonstrate, monitor and improve our sustainability performance in everything we do across the entire value chain.”
Tamir says she’s hopeful about the future.
“Despite all the things that we think that companies can improve, Oxfam obviously engages these companies, because we think there’s a real potential there,” Tamir says. “We see a positive role for the private sector to play in helping to solve critical issues that we as a society are facing today.”
Gene Bartholomew, senior director of corporate food safety at Smithfield Foods, says big corporations have the power and the means to effect real change.
Bartholomew, who recently spoke during the Food Sure show, says one of the first things people usually say to him when he tells them he works in food safety is that they think it’s better to buy from smaller producers.
“Someone is spreading the mantra that big corporations are inherently evil,” he laments. “I think it’s been well proven that the larger food processors tend to be more efficient [creating less food waste]. The push towards smaller producers—one of the net effects of that will be less food for everyone.”
And that’s where consumer education comes in, which can be a struggle.
“Campbell educates consumers about our corporate responsibility initiatives in a variety of ways,” Maltenfort says.
Specifically, the company hosts interactive web series, with stories and videos, and is active on social media, especially under the @CampbellCSR Twitter handle.
The company also frequently posts blogs on the Campbell Soup Company corporate website.
“We host two consumer-facing websites, www.whatsinmyfood.com and www.uncannedbycampbells.com, which communicate our efforts in corporate responsibility and tackle specific questions raised by our consumers,” Maltenfort says.
Last year, Mars Wrigley Confectionery launched the M&M’S Fans of Wind campaign, where it leveraged its position—one of the largest privately held, family-owned businesses—and its visibility of its iconic brands to inform consumers of environmental issues and how the world can fight against climate change.
“The campaign featured our beloved spokescandies to raise awareness around renewable energy. We believe that the more consumers engage in dialogue about addressing climate change, the more the world will change,” Buksar says. “Investing in renewable sources of energy is one of the key aspects of reaching our goal of zero net greenhouse gas emissions from our direct operations by 2040. Mars, Inc. is also very public with its commitments to social responsibility and the progress we have made to meet the UN Sustainable Development Goals.”
In the end, it’s not just about consumers though.
“We invest in our people, products and the communities where we operate, not only because it makes business sense, but also because it is simply the right thing to do,” Buksar says.
For more information:
Cone Communications, www.conecomm.com
Ocean Spray, www.oceanspray.com
Oxfam, Behind the Brands, www.behindthebrands.org
Smithfield Foods, www.smithfieldfoods.com
Campbell Soup Company, www.campbells.com
Mondi Group, www.mondigroup.com/en/home