The Sustainability Opportunity for Retail and Wholesale ...

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  • Outline of Presentation The slides in this presentation are geared towards making the business case for sustainability and a brief overview of how to get started and what role the FMI Sustainability toolkit can play.
  • Lots of terminology out there used to relate environmental and social issues with business: Sustainability – terminology we have chosen as it incorporates both risk and growth opportunities to be gained from environmental sustainability. “Aligning shareholder and societal value.” Corporate Social Responsibility (CSR) Triple Bottom Line (TBL) Full definitions provided at end of presentation. Can discuss what is currently being used in your company and why or your discussions outside of company around terminology (eg. FMI Sustainability task Force) Activity: discuss definitions with group to help determine what works best for your company.
  • Just to clarify that sustainability is not simply the initialization of one program or system, it is a new way of doing business. Companies used to function as more of an island in society and they are now considered more fully integrated. How they operate and conduct business should reflect this. There is no “guide” that will tell you the steps you need to take to be sustainable. Issues vary from sector to sector and from company to company. And almost more importantly, any corporate strategy on sustainability should fit with the organization’s culture to be effective.
  • Just to clarify that sustainability is not simply the initialization of one program or system, it is a new way of doing business. Companies used to function as more of an island in society and they are now considered more fully integrated. How they operate and conduct business should reflect this. There is no “guide” that will tell you the steps you need to take to be sustainable. Issues vary from sector to sector and from company to company. And almost more importantly, any corporate strategy on sustainability should fit with the organization’s culture to be effective.
  • Basically, everyone that is directly and indirectly impacted by your business cares about some element of sustainability. One major shift is that the public expects the corporate sector to address social and environmental issues (not just government or individuals). All of these data points represent ever-growing trends over the last 5-10 years.
  • Business working WITH NGOs for a better business mutual value propositions. While some environmental groups are still simply looking for a reaction and attention from the media, others are very focused on working WITH business to produce results of mutual value. There are MANY MANY more examples of these partnerships with companies large and small representing a broad range of sectors.
  • What does the “next” generation of parents think about sustainability and companies?
  • What does the “next” generation of parents think about sustainability and companies?
  • Yes, the consumers do care and the trend continues to grow significantly. There has been a great deal of talk about the growth of the eco-friendly or green market, here are some of the numbers. The value of this marketplace is reinforced by the interest from the big consumer brand companies such as P&G, General Mills and SC Johnson where “green” products are a major focus on their current and future product lines.
  • Bottom Line: the marketplace cares about sustainability. In the early 1990s, sustainability was limited as a market niche, it is now almost fully mainstream. Sustainability (in some form) is a major growth strategy for a number of large companies including (but not limited to!): DuPont GE The Home Depot Nike Dow SC Johnson Johnson Diversey Hill Phoenix Johnson & Johnson Timberland Goldman Sachs Swiss Re And the list goes on and on….(in the US and even more so globally)
  • “Socially Responsible Investing” used to be limited to avoiding the “sin stocks” (alcohol, tobacco, etc…) or a few, mostly ignored shareholder resolutions. Today, socially responsible or sustainability indexes are used by mainstream investors to evaluate the overall worth of a stock. The number of shareholder resolutions relating to a variety of social and environmental issues continues to set records year after year. In addition to the number filed, more and more are gaining significant support gaining the attention and action of corporate boards.
  • Bottom Line: the marketplace cares about sustainability. In the early 1990s, sustainability was limited as a market niche, it is now almost fully mainstream. Sustainability (in some form) is a major growth strategy for a number of large companies including (but not limited to!): DuPont GE The Home Depot Nike Dow SC Johnson Johnson Diversey Hill Phoenix Johnson & Johnson Timberland Goldman Sachs Swiss Re And the list goes on and on….(in the US and even more so globally)
  • Sustainability in a nutshell. There are new trends in the marketplace created out of environmental and social concern. When we talk about environmental AND social, there are many aspects. The environmental is fairly well understood but the social is still a bit grey – it includes (but is not limited to) treatment of workforce, healthy/safe foods and products for consumers, support for communities in which you operate, etc… Business instead of government is now being looked upon by the public as the ones that should address these concerns because business “has the money and power” and can effect change more quickly than most governments. Business used to see itself as an island within society, it is now a partner. If business sees sustainability as a business issue there is significant value to be realized both in terms of risk avoided and opportunities to be gained. Ignore at your peril….you may not perish but you could see opportunity lost.
  • This is the new equation for business. Social and environmental issues can be market forces just like demographic changes and GDP growth rates The degree and frequency with which social and environmental issues act as market forces are magnified by trends such as economic globalization, global information flows and 24-hour news cycles, the rise of civil society organizations, and the increasing power of and declining trust in global corporations. Taken together, these trends mean that more people around the world have greater expectations of companies and access to much more information. They are able to act together to bring to bear their perspective on these issues in their roles as voters, consumers, investors, employees, and members of civil society. The closer linkage between social and environmental issues and business performance has changed the operating conditions for many companies, both increasing risks (e.g. brand attacks) and creating new opportunities (e.g. market for organics) We will spend the next few slides going through each point on this slide
  • Environmental and social issues are not longer only seen through the regulatory lens. Being compliant is thought to be a given by today’s society. They want to see how you are going beyond compliance and market research shows that the consumer is willing to give preference to those that are able to offer an effective/good product without compromising the environment or society. For the most part, they are willing to pay a slight and at times significant premium.
  • Some environmental/social issues relevant to food retailers. In addition to the fish depletion issue, there are significant concerns around pollution and fish (mercury, dioxin, etc…) Aquaculture holds potential but there are still numerous environmental and health concerns that still need to be addressed to make it a sustainability alternative. The increasing global population coupled with the fact that more people want to eat “better”, more nutritious foods will further strain our global freshwater supply. While some regions of the world have plenty of freshwater, there are concerns that for many regions (including the SW United States) freshwater will be a major concern which will only be exacerbated by climate change. Regardless of what you personally believe about climate change and its impacts, more and more players in the marketplace are taking it seriously and initiating strategies to adapt. This includes the focus on biofuels which already has caused price increases in corn (which is used in just about every product in some form – feed for livestock, high fructose corn syrup, wax on fruit). Climate change will impact your marketplace in some form, the question is how and how can you be prepared?
  • It does not matter what you personally think about climate change, consumers and the marketplace see it as a real threat, demanding real action, including action from retailers. What is your climate change strategy? It can range from reducing your own greenhouse gas emission footprint to helping your customers reduce theirs but it is a serious business issue with competitive advantage repercussions.
  • While some environmental concerns are impacting us today, many will really be felt in the 50 year timeframe. While quarterly earnings don’t allow business to focus on the longer term, customers are starting to expect business to have these longer-term horizons.
  • Our increasingly global world makes the operating environment for all business but especially retailers who are the customer interface for most offerings, extremely complex. Your supply chain is growing more opaque as inputs are increasingly coming from all parts of the world. How can you continue to be in control of what you put in your stores? Who is the responsible party? Or more importantly, who does the consumer THINK is the responsible party? Government used to be all the oversight that was needed according to the public. Growing concerns about toxins in our environment (and impact on human health) as well as origins of products has decreased public trust in federal government oversight.
  • Growing Power of Civil Society (1) Please note the reference of this slide. This is not a slide of a poll done by Greenpeace. The Enron and World Com scandals only solidified the public’s belief that companies only care about the bottom line, regardless whom might be negatively impacted. Need to work WITH non-governmental organizations as their perspective and input can provide valuable advice into trends in the marketplace.
  • Growing Power of Civil Society (3) Each of the activist campaigns related to the pictures above had success in changing the way that the target company/sector did business. For example, Home Depot was one of the first retailers to require Forest Stewardship Council (FSC) certified timber for its lumber sales.
  • Business working WITH NGOs for a better business mutual value propositions. While some environmental groups are still simply looking for a reaction and attention from the media, others are very focused on working WITH business to produce results of mutual value. There are MANY MANY more examples of these partnerships with companies large and small representing a broad range of sectors.
  • Example of both globalization and changing role of gov’t. In the US, we still trust our food safety nets (unlike Europe) but this could change as the sources of our food become more clouded and varied.
  • The growing impact of social and environmental issues combined with the new global trends in the marketplace results in a significantly changed operating environment for ALL companies. Retailers are just starting to see and understand this new environment but it will continue to grow and grow rapidly according to ongoing consumer and investor polls.
  • An overview of the opportunities offered by sustainability. The business case for all of these aspects continues to be analyzed but the growing integration of sustainability into business and also into shareholder analyses reinforces that there must be a bottom line benefit or it would not be of interest.
  • There is a quite a buzz in the mainstream retail marketplace about the growing focus on sustainability and implementation of practices and strategies that reflect this focus. As sustainability begins to infiltrate the retail world, there will be more examples not only of initiatives but financial value.
  • There is a quite a buzz in the mainstream retail marketplace about the growing focus on sustainability and implementation of practices and strategies that reflect this focus. As sustainability begins to infiltrate the retail world, there will be more examples not only of initiatives but financial value.
  • This ties back to the slide talking about sustainability as a change in thinking, not just one or two new initiatives. To effectively address sustainability, it must permeate throughout your company.
  • As sustainability is becoming ore mainstream in business vernacular, what is meant by a sustainable company? Don’t relegate awareness of environmental and social issues to the EH&S department. They are business issues now and a person(s) who is involved in business strategy development needs to be aware of and responsive to them. Start to think about offering and operations through the duel lens of offering benefits not only to shareholders but society as well. An example of this is selling fresh fish. Retailers selling fish is good for consumers as well as fishermen. However, half of the fish stocks in the world are overexploited so starting to source sustainable species would increase the societal value of your fresh fish. Ongoing outreach and engagement with a broad group of stakeholders connects with the need for transparency of business operations. There are differences for public v private companies but be proactive with information about products and operations instead of waiting to be asked.
  • How can a focus on sustainability help business? As society and the world become more connected, sustainability helps companies to take a broader view of their marketplace and connect with stakeholders both in their value chain and beyond. This “connectedness” helps companies see issues and opportunities earlier and also positions companies better for how to minimize the risk or take greatest advantage.
  • When implementing a sustainability strategy, barriers or hurdles will emerge both internally and externally. These are some examples that are quite common and where an approach on delivering value by aligning shareholder and societal value can help you avoid them.
  • Sustainability and the retailer….it will impact all aspects of the business – “before store, in store, after store.” This is a framework to try and simplify how a food retailer should look at sustainability. Detail is provided on the following slide. The FMI toolkit along with other resources will provide the foundation to help you get alignment across the business for your sustainability strategy. To avoid any “skeletons in the closet” and to fully appreciate and understand where you have value at stake, it is good to review sustainability across all aspects of your operations (in-store, supply chain and with customers) before launching a strategy to build greater value.
  • Trying to help associates see where sustainability might “fit” for them and creating alignment around your sustainability strategy. Having the understanding and support of associates is critical to the success of a sustainability strategy. Sourcing is the first pillar on the left: It includes procurement of things that are used and sold in-store. Consumer products includes national labels and private brands. Operations is the pillar in the middle. It includes direct activities of store, most would be considered as part of environmental footprint. Customer is the last pillar on the right. These are the functions where you look to build the value and create brand and growth opportunities from your internal sustainability activities.
  • One person in charge who is familiar with developing business strategy is essential. Support and input from a cross-functional team from relevant parts of the business that can also be involved in implementation. Support from CEO and senior management is crucial. Needs to be a top priority for the company since sustainability impacts all aspects of the business.
  • Since there is no one-sized-fits-all approach to sustainability, FMI is developing a toolkit tailored to the food retail sector. It will be a guide for companies looking to integrate sustainability. It captures learnings from a large assortment of companies that have developed sustainability strategies over the last ten years. The FMI Toolkit builds on a toolkit developed by the Business Roundtable (a group of 160 CEOs from US-based companies) at the end of 2006.
  • All members of the FMI Sustainability Task force provided great input into this presentation. In addition, a few of the companies brought together teams of people to walk through this presentation and provide comments and insights into making it as user-friendly for the retailer as possible.
  • There will be many more mouths to feed in the world and while technology will help to increase agricultural yields and efficiencies, we are already using a good portion of tillable land. Climate change and stressed water systems will alter agricultural systems and will our food chain be able to keep up?
  • Some slides that include detail that you may want to include in your custom presentation.
  • 6-9 billion is a big number but the rate of population growth is what is particularly alarming. It has been estimated that the earth’s capacity is 6.5 billion but of course it is difficult to predict because it depends on how resource intensive a population is. The U.S. is 4% of the world’s population yet consumes over 25% of the resources. An American consumer, on average, consumes about 50% more goods and services than the average Chinese citizen.
  • While the stress on our fish stocks is not apparent to the average consumer, the new “names” of fish means that we have to find new species for our plate as the “old” ones are either no longer available or close to it (think cod) We have always harvested the oceans but do we ever replant? Aquaculture holds some promise of meeting the increasing consumer demand for fish but there are concerns around dioxin in feed, environmental impact of these farms and sustainability of practice since aquaculture still relies on fish meal as feed.
  • There will be many more mouths to feed in the world and while technology will help to increase agricultural yields and efficiencies, we are already using a good portion of tillable land. Climate change and stressed water systems will alter agricultural systems and will our food chain be able to keep up?
  • The Sustainability Opportunity for Retail and Wholesale ...

    1. 2. The Sustainability Opportunity <ul><li>Purpose of Presentation : Provide senior executives with background and business case for initiating sustainability strategies. </li></ul><ul><li>Outline : </li></ul><ul><li>Why is sustainability a business issue for retailers? </li></ul><ul><li>What is sustainability? </li></ul><ul><li>How to initiate a sustainability strategy in your company. </li></ul>
    2. 3. Defining sustainability: Business strategies and practices that promote the long-term well being of the environment, society and the bottom line FMI Sustainability Task Force
    3. 4. Sustainability Is….. <ul><li>A change in mindset and the way you do business and not just a new program or two. </li></ul><ul><li>Very unique to every company and therefore, there is no one-sized-fits-all approach. </li></ul>
    4. 5. Why is Sustainability a Business Issue for Retailers?
    5. 6. Who Cares About Sustainability? <ul><li>Our Customers </li></ul><ul><li>92% of consumers agree with the statement that it is important for the U.S. food industry, both food manufacturers and supermarkets, to be more proactive about addressing environmental concerns. </li></ul><ul><li>FMI-Harris Poll 2007 </li></ul><ul><li>89% of consumers are interested in “eco-friendly” products and 30% actively look for them. Information Resources, Inc. 2007 </li></ul><ul><li>43% of Americans think that they will be extremely green in the next five years while only 11% classify themselves as extremely green now. Wal-Mart Live Better Index 2007 </li></ul><ul><li>Sales of “green” cleaning products increased 52% in 2006. </li></ul><ul><li>Information Resources, Inc. </li></ul><ul><li>Organic food sales were up 109% between 2001 to 2005 and up 22% in 2006. Mintel Research/Organic Trade Association </li></ul>
    6. 7. Who Cares About Sustainability? <ul><li>The Public </li></ul><ul><li>Americans consider a company’s commitment to social issues when deciding the following: </li></ul><ul><ul><ul><li>Which companies they want to see doing business in their communities, 86% (vs. 58% in 2001) </li></ul></ul></ul><ul><ul><ul><li>Where to work, 77% (vs. 48% in 2001) </li></ul></ul></ul><ul><ul><ul><li>Which stocks or mutual funds to invest in, 66% </li></ul></ul></ul><ul><ul><ul><li>(vs. 40% in 2001) </li></ul></ul></ul><ul><li>87% say they want a company to support issues based on where its business can have the most social and/or environmental impacts. </li></ul><ul><li>80% of respondents listed health as the leading issue for companies to address. </li></ul><ul><li>2007 Cone Cause Evolution Survey </li></ul>
    7. 8. Who Cares About Sustainability? <ul><ul><li>61% agreed they are personally responsible for making a difference in the world; </li></ul></ul><ul><ul><li>78% think companies have the same responsibility; </li></ul></ul><ul><ul><li>75% are more likely to pay attention to a company's messages if it has a deep commitment to a cause; and, </li></ul></ul><ul><ul><li>Nearly 90% stated they are &quot;likely&quot; or &quot;very likely&quot; to switch from one brand to another based on a strong association with a good cause. Cone and AMP Insights </li></ul></ul><ul><ul><li>Our Future Employees </li></ul></ul><ul><ul><li>A survey of 1,800 Gen Y-ers (people between the ages of 13 and 25) in 2006 found that: </li></ul></ul>
    8. 9. Who Cares About Sustainability? <ul><ul><li>College graduates are looking for more than just a first job or an internship. They are looking to work for businesses that help the environment. </li></ul></ul><ul><ul><li>80% of those surveyed said they are interested in a job that has a positive impact on the environment </li></ul></ul><ul><ul><li>92% would chose working for an environmentally friendly company. </li></ul></ul><ul><ul><li>Our Future Employees (2) </li></ul></ul><ul><ul><li>From a survey in October 2007 by MonsterTRAK (division of Monster Worldwide geared towards entry-level positions) of college graduates found: </li></ul></ul>
    9. 10. Who Cares About Sustainability? <ul><li>Supermarkets! Green is Green….. </li></ul><ul><li>The average basket size is three times larger when Eco-Friendly or Green products are in the basket, and the more items purchased, the higher the average basket size. </li></ul><ul><li>Potential Green buyers are current Organic food buyers; recognizing that only 10% of Organic buyers are currently purchasing Green products. </li></ul><ul><li>Green and Organic shoppers are 59% loyal (share of grocery wallet) to their chain and more than two times loyal than the average consumer. </li></ul><ul><li>Catalina Marketing September, 2007 </li></ul>
    10. 11. Who Cares About Sustainability? <ul><li>Other Companies </li></ul><ul><li>Of the top 100 largest retailers, 83% are involved in green practices and 62 of those have increased their green investments during the past two years. BDO Siedman Retail Compass Survey, October 2007 </li></ul><ul><li>79% of S & P 100 companies have special sections on their website dedicated to social and environmental policies and performance, up from 59% in 2005. Social Investment Research Analysis Network </li></ul><ul><li>Green consumerism will be a huge driver of innovation and product change in the food retail sector….the biggest consumer trend of them all”. </li></ul><ul><li>Lucy Neville-Rolfe, Tesco </li></ul>
    11. 12. Who Cares About Sustainability? <ul><li>Shareholders/Investors </li></ul><ul><li>In 1990, there were 5 investment indexes based on sustainability in North America, Europe and Australia. In 2007, there are 21 including the Dow Jones Sustainability Index. </li></ul><ul><li>Most of the leading brokerages ( Goldman Sachs, Citigroup, JPMorgan, Merrill Lynch, and Morgan Stanley) have published investment research on the impact of social and environmental trends on the performance of companies in key industries; and, </li></ul><ul><li>51 banks from 17 countries representing an overwhelming portion of the project finance market (including Bank of America, Citigroup, JPMorgan Chase, Wachovia and Wells Fargo) have adopted the “Equator Principles” as a means of standardizing the review of social and environmental factors in lending. </li></ul>
    12. 13. Why is Sustainability an Issue for Business?
    13. 14. Why is Sustainability a Business Issue? <ul><li>The world population is growing at unprecedented rates and putting greater pressure on already overstressed natural resources; </li></ul><ul><li>There are growing expectations on business to help solve environmental and social issues from government, employees, customers and the public broadly; and </li></ul><ul><li>How individual companies respond to these trends will influence their profitability and longevity. </li></ul>
    14. 15. Business Response: Seek Out Opportunities from Social and Environmental Trends Integrate Social and Environmental Trends into Business Strategy & Other Decisions Business Value at Stake Sustainability in the Marketplace: The New Equation Copyright Ecos Corporation 2006 Social & Environmental Issues as Market Forces Global Trends Magnify Market Forces + = Changed Operating Conditions for Retailers <ul><li>Global Population Explosion </li></ul><ul><li>Wealthy Nation Consumption Patterns </li></ul><ul><li>Declining Availability of Natural Resources </li></ul><ul><li>Growth/Impact of Civil Society </li></ul><ul><li>Globalization </li></ul><ul><li>Role of Government </li></ul><ul><li>Connectedness </li></ul>
    15. 16. Environmental & Social Issues: Business Perspectives Old School : cost to be lived with and minimized New School : can add shareholder value Next School : central to brand value Which is your school…today and in the future?
    16. 17. Living Beyond Earth’s Capacity <ul><li>Where Are The Fish? </li></ul><ul><li>About half of all monitored [global fish] stocks are now fully exploited and another quarter are overexploited, depleted, or slowly recovering. 2004 Food & Agriculture Organization </li></ul><ul><li>Better Food Uses More Water </li></ul><ul><li>70% of world freshwater use is for agriculture. Growing global populations coupled with the shifting trend in the diet to more water-intensive food such as meat and fruits will further exacerbate already stressed regional water supplies. United Nations Environment Programme </li></ul><ul><li>Climate : The Food Chain’s Weakest Link </li></ul><ul><li>The impact of climate change coupled with the efforts to mitigate climate change will have a variety of impacts on availability and price of many agricultural products, especially corn. Wall Street Journal Market Watch May 2007 </li></ul>
    17. 18. Climate Change <ul><li>A group of 284 institutional investors with assets of $41 trillion under management have requested and received detailed information from approximately 1000 companies about their greenhouse gas emissions and plans for managing those emissions. </li></ul><ul><li>In a 2007 survey of consumers in the US and the UK, 60% of respondents said that they want companies to provide more product-based information at the point of sale and half would rather do business with companies that are working to reduce their contribution to global warming . AccountAbility </li></ul><ul><li>In response to shareholder request, The Home Depot, Lowe’s and Simon Property Group (largest shopping mall company in US) have agreed to significantly expand reporting and disclosure on energy-efficiency performance, with the two big-box retailers also agreeing to discuss greenhouse gas emissions . GreenBiz.Com </li></ul>
    18. 19. Living Beyond Earth’s Capacity Humans are drawing on capital rather than interest, and once that is exhausted, they will find Mother Nature reluctant to make a loan.   February 13, 2007   The Columbus Dispatch
    19. 20. Global Becoming Local: Trends in the Marketplace <ul><li>The public believes retailers are responsible for the environmental and social issues associated with their supply chain (Think Home Depot) </li></ul><ul><li>Increasing globalization continues to cloud the source of raw materials and government food inspectors are stretched too thin (Think China) </li></ul><ul><li>Compliance with environmental, health and safety regulations are no longer the ceiling for the public’s expectations but the floor (Think Teflon) </li></ul>
    20. 21. Activists are Becoming Increasingly Credible World Economic Forum 2005 % of “yes” minus % of “no”
    21. 22. Activists are Having an Impact
    22. 23. Companies Working with Environmental Groups for Sustainable Results <ul><li>World Wildlife Fund and Coca-Cola have created a partnership to conserve and enhance fresh water resources around the world. </li></ul><ul><li>Unilever partnered with Greenpeace to develop HFC-Free Freezers and market them to specific customers. </li></ul><ul><li>FedEx Express and Environmental Defense worked together to develop new generation of pickup and delivery trucks that decrease particulate emissions by 96 percent and travel 57 percent farther on a gallon of fuel, reducing fuel costs by over a third. </li></ul><ul><li>GreenBlue Institute created the Sustainable Packaging Coalition that brings together a range of stakeholders to create a more robust environmental vision for packaging. </li></ul>
    23. 24. Globalization & Safety of U.S. Food Supply Chain
    24. 25. The Changed Operating Environment <ul><ul><li>Higher Consumer Expectations (want performance and price while being environmentally and socially responsible.) </li></ul></ul><ul><ul><li>Voluntary Actions Becoming New Standard </li></ul></ul><ul><ul><li>Sustainable Supply Chain Offerings </li></ul></ul><ul><ul><li>Shareholders/Investors Using Sustainability in Ratings and Analyses </li></ul></ul>
    25. 26. The Opportunities <ul><li>Growth Opportunities </li></ul><ul><ul><li>Grow Market Share </li></ul></ul><ul><ul><li>Build Customer Loyalty </li></ul></ul><ul><ul><li>Differentiation and Branding </li></ul></ul><ul><ul><li>Improve Employee Morale and Loyalty </li></ul></ul><ul><ul><li>Increase Efficiency/Productivity </li></ul></ul><ul><li>Reduce Risk </li></ul><ul><ul><li>Help Secure the Supply Chain for Future </li></ul></ul><ul><ul><li>Avoid Negative Public Opinion </li></ul></ul><ul><ul><li>Prepare for/ Be Ahead of New Regulations </li></ul></ul>
    26. 27. What Retailers are Already Doing…. <ul><li>Recycling = Revenue : Three FMI Members made close to $50 million in revenue in 2006 from recycling plastics and cardboard. </li></ul><ul><li>Being Green = Making Green : Several major retailers are focusing on “green” as the driving strategy behind new store development. </li></ul><ul><li>Seismic Shift in Supply Chain : Some of the largest retailers in the world are implementing sustainable practices throughout their supply chains resulting in major positive impacts on the bottom line, and impacts on the price and availability of environmentally and socially preferable goods and services. </li></ul><ul><li>Catch of the Day for Tomorrow : A small retail chain responded to consumer requests for more choice in sustainable seafood. They adopted Fishwise , a sustainable seafood education and marketing program. Results were increased customer loyalty, sales and profits and have transitioned their product offering to almost completely sustainable seafood. </li></ul>
    27. 28. How to Initiate a Sustainability Strategy in Your Company
    28. 29. Change in Mindset: Sustainability is More Complex Than Any Other Market Trend Past or Present <ul><li>Impacts all aspects of business </li></ul><ul><li>Most effective strategies are those that deliver financial value for the company (not PR or philanthropic) </li></ul><ul><li>Involves Those in the Value Chain and Beyond: </li></ul><ul><ul><li>- Suppliers - Producers </li></ul></ul><ul><ul><li>- Governments - NGOs </li></ul></ul><ul><ul><li>Consumers - Shareholders </li></ul></ul><ul><ul><li>Employees - Other </li></ul></ul>
    29. 30. A Sustainable Company…. <ul><ul><li>Understands environmental and social issues as business issues </li></ul></ul><ul><ul><li>Develops business strategies around issues that generate shareholder and societal value </li></ul></ul><ul><ul><li>Continually engages with a broad network of external stakeholders within and beyond the value chain </li></ul></ul>
    30. 31. Integrating Sustainability Will… <ul><li>Help manage complexity from environmental and social issues now impacting the marketplace </li></ul><ul><li>Sharpen the “over the horizon radar” and open up “insights” into the evolution of the market place </li></ul><ul><li>Hedge against future risks by connecting to key stakeholders and trends in society </li></ul>
    31. 32. Potential Hurdles in Implementing Sustainability <ul><li>Internal Alignment : Sustainability impacts all aspects of the company and must be seen as aligning with the culture and changing the way employees think. There will be naysayers, it takes time to have this alignment. </li></ul><ul><li>Not Just “Feel Good” Fluff : Sustainability tends to be relegated to the philanthropic department or for external affairs to handle but it is a business issue with real value at stake. </li></ul><ul><li>Walk the Talk : A company that makes big promises with little delivery or one that brands itself “green” with little behind the curtain will get caught and labelled a “greenwasher.” </li></ul>
    32. 33. Framework for an Effective Sustainability Strategy
    33. 34. Detail on Framework
    34. 35. Your Sustainability Team <ul><li>Identify one person to lead the effort who has experience in developing and implementing business strategy. </li></ul><ul><li>Build a core-team representing areas of Operations, Sourcing, Management and Marketing/Consumer Affairs - should assist in development and implementation. </li></ul><ul><li>Senior Management must provide support and be included in regular updates on progress. </li></ul>
    35. 36. Where to Start: The FMI Sustainability Toolkit <ul><li>A framework and guide to help you initiate and “operationalize” sustainability within your company at the strategic level </li></ul><ul><li>Practical tips, advice and strategies on approaching and implementing sustainability </li></ul><ul><li>Best practices, learnings and other examples of companies in the food retail value chain that are working on sustainability </li></ul>
    36. 37. FMI’S Sustainability Task Force Mission: To develop the tools and resources needed by the industry to help move sustainability initiatives forward.
    37. 38. “ It is not the strongest species that survive, nor the most intelligent, but the ones who are most responsive to change.” -Charles Darwin-
    38. 39. FMI recognizes the commitment and support of our sponsoring companies in the development of the soon to be released FMI Sustainability Starter Kit (release January 2008). We are grateful for their help in making this important resource available to help you move forward quickly with your company sustainability programs:
    39. 40. ADDITIONAL SLIDES ON ENVIRONMENTAL ISSUES
    40. 41. Living Beyond the Earth’s Capacity Global Population Increasing Exponentially Science Rationale
    41. 42. Where Will We Get Our Fish in the Future? Science Rationale UN Millennium Assessment Living Beyond the Earth’s Capacity
    42. 43. UN Millennium Assessment Increase in Portion of Land Cultivated Continues More land was converted to cropland in the 30 years after 1950 than in the 150 years between 1700 and 1850. Cultivated Systems in 2000 cover 25% of Earth’s terrestrial surface Living Beyond the Earth’s Capacity

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