Richard Ellis at the Asia Pacific Summit 2011

THE IMPORTANCE OF STAKEHOLDER DIALOGUE IN BUILDING SUSTAINABLE AND SUCCESSFUL CSR STRATEGIES
Richard Ellis Director of Corporate Social Responsibility AllianceBoots

Why is CSR integral to our business?
Builds and maintains TRUST and reputation with all of our stakeholders
Employee attraction and retention
Commercial opportunities to reduce cost and generate income
Stimulation, innovative, development – helping us prepare for the future
Positive public relations opportunities
A risk management tool
It is embedded in our business
IT IS THE RIGHT THING TO DO AND
GOOD FOR BUSINESS

What does ‘Embedding CSR’ mean?
Making CSR the responsibility of everyone
No CSR infrastructure or dedicated budgets – no abrogation of responsibility
Encouraging people to bring their personal behaviours to work
24 hours a day, 7 days a week, 365 days of the year activity
Utilising our people’s knowledge of the processes they manage – they are the experts in their chosen field
QUITE SIMPLY THE WAY WE DO BUSINESS

How we have embedded CSR into our daily working practises …
Developing sustainable, long lasting projects
Leadership from the Board Social Responsibilities Committee
Agreed strategy and objectives across the group
Process for managing the agenda
Measuring our achievements
Simple clear communications
On-going stakeholder dialogue to ensure activities are relevant
Celebrate our successes – winning awards
Consistent approach irrespective of economic conditions
WE KEEP IT SIMPLE

The Alliance Boots process for managing CSR: “The Wheel of Fortune” Stakeholder dialogue academics media non governmental organisations shareholders government socially responsible investment employees suppliers customers

NGO scrutiny as high as ever

Positive two-way dialogue with all Government departments and political parties David Cameron – ‘Change one thing’

The four CSR activity areas

21 strands of CSR activity

CSR management process

The “Wheel of Fortune”

Businesses have obvious incentives to act of their own accord
Reducing direct and indirect energy consumption saves us costs
Showing respect for the environment enhances our reputation and builds on the TRUST our customers have in us
Acting ahead of regulation brings first mover advantages – we can maximise the benefits and opportunities being presented
Avoids the criticism that our actions are only happening because of legislation – you are positioned as a “leader”
In the UK the Climate Change Levy already taxes energy use (as opposed to carbon emissions) so taxing “energy” is already with us – cost Alliance Boots £1.8m last year. The Renewables Obligation cost us another £1.2m. What was the cost to your business last year?

Practical steps that Alliance Boots is taking 1. Air freight
Previously “Category Teams” decided on the transportation method for goods from overseas
Decision was made that any air freight orders had to be counter signed by the Commercial Director
THE RESULT
A 79% decrease in air freight expenditure (£556K saving)
A 68% decrease in chargeable weight (258k kg)
242 tonnes of CO2 saved
But packaging during 2009 did reduce by 25% and air freight costs fell overall in 2009 … but still a great result

Practical steps that Alliance Boots is taking 2. Christmas packaging
900 tonnes reduction in total gift weight compared with Christmas 2008
500,000 fewer cardboard outers used in transit packaging
8.8 million fewer polythene bags used in transit
£1.3 million savings gained from this waste cutting programme

Practical steps that Alliance Boots is taking 3. A transport example from Boots UK in 2007
Double deck trailer units (2007 saved 5.2m road kilometres)
Our innovative MUD trailers
Wagon and drag (2007 saved 1.1m road kilometres)
Roll out driver training
Use of the railways
Collections from suppliers (2007 saved 2.2m road kilometres)
These activities have seen a reduction of some 5% in carbon emissions AND this is improving AND has saved £1.8m in fuel costs in 2007

Practical steps that Alliance Boots is taking 4. Waste and Recycling at Boots UK
Waste from stores comes back to Nottingham to be processed (Costs £1m, save £2.3m of landfill costs and generate £700k of revenue from sales)
Production of singles
Free Standing Display Units (Made from cardboard, are fully recyclable, saved 430 tonnes of waste and are £156,000 cheaper to produce, other benefits flat packs mean you get 20 not 6 on a pallet)
Incineration
Amount of waste is increasing as the turnover increases and the Company becomes more successful but not at the same percentage rate AND a larger proportion is being recycled

Practical steps that Alliance Boots is taking 5. Using carbon emissions from our Energy Centre to grow algae as replacement product ingredients
This is more about potential and innovation
Since 1915 Boots has had a Combined Heat and Power facility at Nottingham
Very efficient … generating savings of some £1.6m per annum
Use the carbon emissions to grow algae … proven to work in the laboratories
Which are used in products
More sustainable ingredients
DEFRA have provided a grant of £1m to set up the process and evaluate its merits
Potentially a complete “Virtuous Circle”
Think of the Marketing and PR opportunities if this can be made to work commercially

The Boots UK sustainable product journey

Richard Ellis at the Asia Pacific Summit 2011

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