Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Whole Foods CSR Analysis

2,495 views

Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

Whole Foods CSR Analysis

  1. 1. It’s all interactive, it’s all connected together; there’s no separation.
  2. 2. Understanding of their corporate social responsibility Holistic, inclusive implementation of CSR program to benefit of all stakeholders. Relevant Stakeholder-centric Active
  3. 3. CORPORATE SOCIAL RESPONSIBILITY AT WHOLE FOODS program analysis and investment recommendations INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION
  4. 4. Introduction to Whole Foods INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION “Whole foods” Ideally unprocessed and unrefined Founded in 1980 in Austin, Texas Expanded to become world’s leading retailer of natural and organic foods Over 265 stores in North America and the United Kingdom Market stats to the right 
  5. 5. Key Products & Services INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION 365 Everyday Value Value branding means an emphasis on: • Only products that meet the store’s standards for being “natural” • “Minimally processed foods that are free of hydrogenated fats...” • Unacceptable Food Ingredients List • Supermarket, dietary supplements, personal care items, In-store eateries
  6. 6. Overview of Competitors INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Tesco PLC Sainsbury (J) PLC Wm Morrison Supermarkets PLC Tesco PLC X5 Retail Group NV Companhia Brasileira Ocado Group PLC Wesfarmers Ltd Greggs PLC Grupo Comercial Chedraui The Kroger Co. Whole Foods Market, Inc. Other Tesco, PLC • 220 million dollars annually in funds, food and products to support local communities • 80+ Feeding America food bank partners, women's health, the troops and their families. Kroger Co. Comparing CSR Comparing Market Share
  7. 7. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION CONSCIOUS CAPITALISM SECTION 2 IDENTIFYING, FRAMEWORK, STAKEHOLDERS
  8. 8. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION CONSCIOUS CAPITALISM “Conscious business is not the same as Corporate Social Responsibility. CSR is taking a traditional, profit-centric business model and grafting onto it a social-responsibility department…But it doesn’t necessarily link to the purpose of the business, whereas the conscious business is inherently socially responsible, because creating value for stakeholders and communities is at the very essence of what they’re doing.”
  9. 9. Identifying a Complex “Conscious Business” Program INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Step 1. Categorize Stakeholders Step 2. Condense Mission Step 3. Network Stakeholders and Objectives Enable a holistic evaluation of the program by establishing metrics and analyzing specific examples APPLICATION: EVALUATION & ANALYSIS
  10. 10. Step 1. Categorizing Whole Foods’ Stakeholders INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Producers Certifiers Employees Shareholders Customers Communities
  11. 11. Step 2. Condensing the Whole Foods’ Mission INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Core Values Environmental Stewardship Caring for Communities Organic Farming Seafood Sustainability Whole Trade The Whole Foods’ Conscious Business framework is best identified by networking the Whole Foods’ mission with its stakeholders. This “idea web” generates and solidifies an inclusive and holistic approach to conscious business.
  12. 12. Stakeholders: INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Whole Trade Guarantee: Four Key Criteria Quality Premium Price to the Producer Better Wages & Working Conditions Environment CSR IN ACTION: Whole Planet Foundation Locally Grown: Local Producer Loan Program Defining Producers: Producers include global and local farmers and seafood harvesters, specifically focused on developing nations and requiring organic farming. Producers
  13. 13. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Defining Certifiers: Whole Trade Certifier Partners are organizations, institutions and alliances that internationally known for their services in certifying producers as to their adherence to environmental and fair trade standards. Partnerships Fair Trade USA Rainforest Alliance Fair for Life Fairtrade International Stakeholders: Certifiers
  14. 14. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Defining Employees: Employees are one of the primary stakeholder groups in the Whole Foods CSR framework, working in Whole Foods grocery stores around the US and the world. Gain-sharing Shared Fate Compensation limited to nineteen times the average total compensation of all full-time Team Members in the company. • CEO John Mackey has set his annual salary at $1 and receives no stock options or cash bonuses. Philosophy of Egalitarianism Decentralized team leadership structure CSR Shortcomings: Unionization Stakeholders: Employees
  15. 15. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Don’t take our word for it. The people who know Whole Foods best are the employees. To the right are the three most recent employee reviews on Glassdoor.com, a crowd- sourced employment rating service. Stakeholders: Employees
  16. 16. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Defining Shareholders: Shareholders are investors in the Whole Foods brand, not necessarily direct consumers, producers, or employees, but stakeholders in the success of the company nonetheless. Stewardship “We are stewards of our shareholders' investments and we take that responsibility very seriously. We are committed to increasing long term shareholder value.” Profits “We earn our profits every day through voluntary exchange with our customers. We recognize that profits are essential to creating capital for growth, prosperity, opportunity, job satisfaction and job security.” Stakeholders: Shareholders
  17. 17. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Defining Customers: Customers are Whole Foods’ shoppers and direct contacts on a daily basis in stores. They are in many ways the most important part of the stakeholder network, and the Whole Foods platform is targeted to attract a specific type of conscientious person. Quality Standards Seafood Quality Meat and Animal Welfare Unacceptable Ingredients Whole Body Quality Organic Body Care Premium Body Care Organic Food “Satisfying and Delighting” Education Meaningful Value Retail Innovation Additional GMO Labeling Reusable Bags Eco-Scale Ratings CSR Shortcomings: Cost Stakeholders: Customers
  18. 18. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Local Communities Local Producer Loan Program Store food donations Community giving days (5% days) Global Environment Organic agriculture Non-GMO Products Wild-caught sustainability Defining Communities: Whole Foods’ stakeholders in terms of communities are two-fold. They include local communities that are directly impacted by stores, and the global community in terms of mutual, cross-cultural concerns. CSR IN ACTION: Whole Kids Foundation Global Community Whole Planet Foundation micro-lending Aquaculture Certifier Program CSR IN ACTION: Green Mission Stakeholders: Communities
  19. 19. Metrics for Valuation of Corporate Social Responsibility INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Activeness Active vs. Passive Centricity Stakeholder-centric Relevance Connectivity between industry and practiced responsibility MSCI’s Environmental Social Governance Index Y Overall: 4 G Environment: C8/M5 G Customers: C5 G Human Rights & Community: C10/M7 Labor Rights: C4/M3Y G Governance: C10/M7 Kroger & Tesco: 2
  20. 20. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION IN ACTION, NOT IN WORDS SECTION 3 CSR IN ACTION, CSR SHORTCOMINGS
  21. 21. Corporate Social Responsibility in Action, Not Words INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION CSR IN ACTION What is Whole Foods done right? Whole Planet Foundation Whole Kids Foundation Green Mission CSR SHORTCOMINGS What has Whole Foods done poorly? Unionization Cost
  22. 22. CSR IN ACTION: INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION By Our Count Relevant: Directly works with Whole Foods offshore producers and suppliers therefore stays within its industry. Shareholder-centric: Specifically centralized around the producer/supplier stakeholders Active: Strong foundation that Whole Foods plans on propelling forward, continuing the social responsibility that Whole Foods has towards their stakeholders in developing countries. G Human Rights & Community: C10/M7 Program Summary A private, nonprofit organization founded by Whole Foods with the purpose of alleviating poverty in communities that Whole Foods depends on for supplies and products through microcredit. Whole Planet Foundation
  23. 23. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION By Our Count Relevant: Health and Nutrition parallel with the food industry as a whole. Shareholder-centric: The Whole Kids Foundation directly targets and benefits their communities as stakeholders. Active: Whole Kids Foundation is a hands-on and sustainable program that Whole Foods plans to permanently continue into the future. G Human Rights & Community: C10/M7 Program Summary Through partnerships with organizations, schools and educators, the Whole Kids Foundation strives to end the childhood obesity epidemic through support, education, and engagement in schools throughout the U.S., Canada and the U.K. CSR IN ACTION: Whole Kids Foundation
  24. 24. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION By Our Count Relevant: Dedication to the 3 r's and renewable energy benefit Whole Foods as a company within the scope of their industry. Shareholder-centric: Benefit to all stakeholders based on mutual interest in environment Active: Green Mission actively and permanently contributes to the sustainability of the environment. Environment: C8/M5G Program Summary Whole Foods pledges to reduce, reuse and recycle throughout all facets of their company as part of their core mission they succeed to do so. CSR IN ACTION: Green Mission
  25. 25. CSR SHORTCOMINGS: INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Labor Rights: C4/M3Y Affects “Employees” stakeholder group Unionization as an issue Labor is a CSR issue because a company cannot fulfill its responsibilities to society if it cannot meet its commitment to the employees Issue Summary • Company voices it’s opposition towards unionization of their workers • Union reports that Whole Food employees earn less than industry standards Whole Foods’ Response • Company asserts that productivity bonuses bring wages in line with standards • Whole Foods believes unions aren’t in line with their work environment • Average CEO compensation at large US companies is 243x that of the average US worker - multiple is 19x at Whole Foods Unionization
  26. 26. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION G Customers: C5 Independent Consumer Analysis Affects “Customers” stakeholder group Cost as an issue Cost is a CSR issue because a company that unduly sacrifices cost for quality or specialized products is not fulfilling its responsibility Issue Summary • Nicknamed “Whole Paycheck” • High prices in comparison to some competitors Whole Foods’ Response • Strategy of “Price Perception” • Taking cuts as a company to keep grocery prices lower CSR SHORTCOMINGS: Cost
  27. 27. EVALUATION SECTION 4 REVISITING METRICS, +/- ASPECTS INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION
  28. 28. Snapshot: Measuring Whole Foods’ Program INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION MSCI ESG Takeaways • MSCI’s ESG confirms intuition - grocery industry is relatively safe • Larger competitors undoubtedly have larger barriers in achieving high ESG scores and they all have room for improvement • Only yellow ratings in labor management • Overall “4” rating (4/10) MSCI Intangible Value Assessment – IVA Takeaways • 93rd percentile for Raw Material Sourcing, 100th percentile for Nutrition / Health, 70th for Corporate Governance. • Worst scores in Labor Management and Product Carbon Footprint • Overall AA rating (AA/AAA) Competitors • Whole Foods’ Market share isn’t huge for groceries, much larger for organics. • Kroger & Tesco - “2” rating in ESG • Competitor programs are not relevant, active, or stakeholder- centric Our Metrics • We’re looking for a company that recognizes its responsibilities, and a CSR Program that is: • Relevant • Stakeholder-centric • Active, not passive
  29. 29. Pro/Con of the Whole Foods CSR Program INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION PROS • Programs meet the standards we created (active, relevant, stakeholder-centric) • The program is sustainable, growing in step with profit • Highly rated working environment by employees • Exceptional environmental conscientiousness • Network of partnerships, i.e. suppliers, certifiers CONS • Low rated working environment by objective reviewers • Higher prices than some competitors because of CRS efforts • Corporate model untested in non-western cultures
  30. 30. CONCLUSION SECTION 5 WHY WE SAY YES TO WHOLE FOODS INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION
  31. 31. INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Why Investing in Whole Foods is the Right Move for You Everything that Whole Foods does is connected to their Conscious Capitalism philosophy The negatives in the presentation are legitimate concerns, but Whole Foods has provided principled responses in both cases, proving themselves open to concerns Whole Foods is not just accountable to you as a shareholder, but ALSO as a member of local and global communities you are a part of. Remember: It’s all interactive, it’s all connected together; there’s no separation.
  32. 32. Presentation Notes INTRODUCTION | CSR ISSUES | EXAMPLES | EVALUATION | CONCLUSION Presenter Information: • Rory Slatko rs5108a@student.american.edu • Samantha Cohen sc6730a@student.american.edu • Lauren Cederstrom lc9876a@student.american.edu

×