Outside of the relatively small community of sustainability and CSR professionals in the food industry, corporate responsibility is often assumed to mean some sort of philanthropy. CSR reports with smiling children, green fields and clear waters often imply that the company cares deeply about their customers’ welfare, the planet’s health, and their employees’ happiness.
And that’s precisely the point. Communications experts intend that to be the primary take-away of a CSR report. But really…how many people think beyond the smiling children or the clear blue water? And that’s fine. If those communications work (do they?), then let’s leave the communications experts to it.
No shame in selfishness
But among ourselves, let’s not talk about any other motivation besides selfishness. And I mean that in the most positive way. A company is expected to be selfish. Some companies go a little too far with this sense of self; but really, that’s what executives are supposed to do – be selfish for their own gains, the gains of their shareholders (yes, shareholders, not stakeholders), and maximize their profits.
So, why should we tiptoe around this point? I am well aware of – and admire greatly – companies that buck this trend and adhere closely to their moral principles, but let’s face it, they are very much in the minority. Selfishness, the uncomfortable and unattractive truth that drives every business, is completely compatible with sustainability and should be the motivation behind all corporate responsibility activities. Sustainability is not a philanthropic expense to write-off. Sustainability is an exercise in maximizing the profitability and longevity of the company. So let’s talk about it openly and frankly in these terms.
To explain further, let’s look at the example of a large international candy bar maker. There is a clear trend now to move towards sourcing fairtrade cocoa. There are 5 key principles that have driven the fairtrade movement since the early 70s – fair wages, environmental responsibility, technology and financial assistance, community organizing, and consumer education. For most of the past 40 years, fairtrade has been a fringe movement that has had very little chance of making a significant dent in the way global business behaves. Challenges from less stringent certification agencies such as the Rainforest Alliance were seen as obvious failings in the pious and purist views of fairtrade.
Until recently. Let’s review the realities on the ground. In January 2005, cocoa was $1549.13 per tonne. In July 2011, it was $3015.64 per tonne. The reasons are not complicated. Most of the world’s cocoa comes from Ivory Coast and Ghana in West Africa and in those two countries, cocoa production is handled very differently. In Ghana, cocoa is treated as a natural resource and the government spends time and effort trying to ensure a quality and reliable supply for its important customers. In Ivory Coast, things are very different. The government has been preoccupied by political struggles over the past 10 years and national infrastructure has been largely ignored. And as evidenced in the steady decline in supply, they have been often overwhelmed by these challenges and farms have been abandoned.
Lessons from a sustainably selfish candy bar maker
So, what is a candy bar manufacturer to do? Cocoa is obviously key ingredient in their product.
It’s fairly simple – a company agrees to purchase cocoa from a community-organized, democratically-run group of farmers (some of these groups include hundreds, if not thousands of farms). They agree to help out financially (which usually means a down-payment on future crops). They pay a premium to the farmer (over the market commodity price) that is used to build infrastructure and community services for the farmers and their families, ensuring kids go to school and healthcare is provided (in turn ensuring a healthy and productive future workforce). They work with the European labelling group to get certified and put the fairtrade label on their product, thereby educating their consumer. And the democratically-run group of farmers have a guaranteed income to support their families today, invest in infrastructure and farm health in the future, and deliver a quality product that meets their customers’ requirements. In the meantime, western consumers enjoy their candy bars without any interruption and the customer (the candy maker) cuts out the additional expenses of middlemen and other processors thereby additionally offsetting their new costs.
There are a number of other complicated factors involved in cocoa production and candy bar manufacturing, but the point here is clear: The candy bar makers are not sourcing fairtrade cocoa because it makes children smile or their customers more loyal (although they are hoping for this as a side-effect), they are doing this because they need to ensure a reliable and quality supply of cocoa. They are doing it because the prospects for keeping their business profitable in the long run are greatly diminished without it. They are doing it for purely selfish reasons. And that’s great! It’s great for them. It’s great for the people who eat the candy bars. It’s great for the investors who enjoy their dividends and see their premiums rise. And, by the way, it’s also great for Ivorian farmers.
Selfish sustainability should be the topic in every board room in every company, large and small, around the world. It’s not about smiling children and flowers and clear ocean waters. It’s about efficiency, and longevity, and commodity prices, and profitability.
Sara Pax is the president of Bluehorse Associates, a developer of environmental sustainability metrics specialized in the food and beverages industry that includes the web-based, product-level lifecycle assessment tool Carbonostics. www.carbonostics.com