Introduction

Sustainability and corporate social responsibility (CSR) are terms that reflect how businesses are involved with the world around them, including people and the environment.

More and more, consumers expect businesses to act in ways that are environmentally sustainable and socially responsible. You will need to consider both these factors for your business.

In this section you will learn:

  • what sustainability and CSR mean to industry
  • the benefits of having sustainability and CSR programs
  • how to implement those programs

What sustainability and CSR mean to business

Sustainability is about running your business without impairing the needs of future generations or negatively impacting our natural environment. Examples include:

  • managing inputs to minimize your footprint, utility costs and waste
  • using bio-based and recyclable packaging
  • sourcing local ingredients
  • optimizing and maintaining your processing so that your inputs do not end up as waste outputs
  • finding ways to reuse materials in a way that ensures food safety. Reduce leaks, spillage, unnecessary packaging and turn off equipment when the work is done. Recycle spent packaging and metals (send your organic waste to a bio-digester). Rewarding positive behaviour is the simple acknowledgement of good effort drives behavioural changes faster than negative feedback.

CSR means taking responsibility for your company’s actions and having a positive impact on the world around you. This can include tying charitable donations to marketing to increase the visibility of your positive contributions.

Many businesses are embracing a triple bottom line approach to sustainability — an approach that integrates the traditional measure of corporate profit—the “bottom line” of the profit and loss account in addition to measuring how socially and environmentally responsible an organisation has been throughout its operations. The triple bottom line thus consists of three Ps: profit, people and planet. It aims to measure the financial, social and environmental performance of the corporation over a period of time.

Sustainability and CSR can build a positive reputation for your business. Increasingly, companies are joining together to improve working and environmental conditions in global supply chains, as well as seeking recognition and certification for their sustainability and CSR efforts.

Benefits of sustainability and CSR programs

Developing programs in sustainability and CSR for your food business involves:

  • understanding how these programs create value, reduce costs and create a competitive advantage
  • creating a strategic plan to become lean, clean and green
  • connecting with your customers about sustainability
  • measuring your progress

Done well, a company’s approach creates value by:

  • reducing costs and returning cost savings to the bottom line
  • making it easy to meet government environment laws and avoid future regulation
  • addressing consumer concerns and reducing risks of brand damage (for example, pay inequity)
  • increasing community connections
  • engaging employees
  • allowing the company’s shareholders to contribute to charity and create the changes they want to see in their world

Cost savings

Only one-third of the energy (for example, electricity, gas) that a typical food manufacturer pays for goes into the products that they make. The rest is wasted and simply adds to costs. The way your business uses energy and water has an impact on your bottom line. Sustainability lowers costs, so it is a win for you, your supply chain partners, your customers and the environment.

Competitive advantage

You may have wholesale clients (retailers) that want you to take action on sustainability. Some retailers believe that firms must either become sustainable or lose their customers. These retailers may actively monitor their suppliers for things like continuous reduction in packaging waste.

Implementing sustainability and CSR programs

How to get lean

You can look at other organizations in your community that use energy inputs efficiently or connect with contacts made through industry associations. Join the Excellence in Manufacturing Consortium (EMC). They can link you to resources and best practices and connect you to other peer businesses.

Consider getting a coach. The Provision Coalition can provide sustainability coaching for packaging and manufacturing. Taking the time to talk to professionals may cost you up front, but the money you spend can provide a solid return.

How to get clean

Protect your brand. Consumers today are concerned about issues such as child labour, fair trade, farming methods and product origins. What your customers think about your brand is extremely important. A marketable and clean image can help ensure your brand’s success.

Consider your production facilities. Consider how your consumers will view your processing facility. Can it be operated in a sustainable manner that is also cost effective?

Think long term about safety, sustainability and CSR. Consumer choice is often driven by low prices however, things like product integrity and fair trade can command a premium. Products with a brand that are valued by consumers are often priced 20% above no name products. Good sustainability and CSR messaging can contribute to your brand’s value.

Know what retailers expect. Producers, processors and retailers all need to make money to stay in business. They want greener and cleaner products for their shelves, products with less risk, lower transport costs and lower weight packaging.

How to get green

Being green is all about how you make your product. Since 1999, the Dow Jones Sustainability Index has proven that companies who manage the details of sustainability are profit leaders.

Partners in project green

Partners in Project Green (PPG) is an organization that brings sustainability solutions that drive real business benefits. PPG provides critical knowledge, effective programs and access to a community of like-minded peers.

PPG helps businesses in the Pearson Eco-Business Zone unlock collaborative advantage and extract maximum value from pursuing sustainability excellence in the areas of energy performance, waste management, water stewardship and stakeholder engagement.

PPG’s online green vendor directory includes everything from waste management providers and energy management companies, to green technology developers and investors.

Manage your internal footprint. Knowing the footprint of your products within the whole supply chain starts with knowing how each product is made and what carbon it generates. A lower-cost, smallest-footprint product will position you to compete well in the market.

Get verification. Have a third party verify that you meet their standard. This will validate your sustainability and make you more credible to buyers. For example, carbon reduction and utility cost savings can be done through utility tracking, which is linked to product costing models. Once your internal footprint is managed, it is easier to understand your supply chain footprint and get third-party verification.

There are programs available that address specific areas like carbon footprint verification, paying ingredient suppliers reasonable wages (fair trade certified) and using environmentally friendly practices (organic certification). These programs generally have cost and compliance/audit requirements. However, the margin gains you make by improving your sustainability should offset the initial cost of compliance.

Avoid greenwashing. Making green claims for a product without being committed to sustainability is a challenge for companies that want to use sustainability as a marketing tool. Only 5% of products that claim to be green are verified, and of those only 30% avoid these types of greenwashing:

  • having a hidden trade-off (the label claims to not contain a bad ingredient or packaging feature, but neglects to point out another equally bad feature contained in the product)
  • no proof for a claim
  • vagueness, including references that suggest a claim
  • irrelevance (for example, claiming a product is cholesterol-free when the product is naturally cholesterol-free)
  • claiming the lesser of two evils (such as being organic but grown where a rainforest once stood)
  • claiming fair trade ingredients but being over packaged

Check for retailer support

All retailers have their own take on sustainability and CSR. Coordinating your approach to work with their programming can boost the strength of your marketing.

Look for supply chain support

Check out these examples of retailers committed to CSR:

Checklist

  • I have identified the sustainability and CSR factors that matter most to my suppliers and customers (for example, reduced packaging, fair trade, organic, locally sourced, reduced carbon footprint).
  • I have an energy and water efficiency management tracking system in my facility.
  • I have talked to other organizations about how to be lean, clean and green.
  • I know the carbon footprint of every step in my supply chain and am researching how to reduce.
  • I am looking into getting third party verification for my sustainability efforts.
  • I am considering which charities or environmental organizations my business could support.