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Wednesday December 3rd 2008

Businesses believe that corporate responsibility can be a useful tool

With times are as tough as they are at the moment, retailers could be forgiven for allowing corporate responsibility to slip down the business agenda while attention is focused elsewhere.

By Helen Dickinson

However, a report which hit my desk recently revealed some interesting findings about how businesses believe that corporate responsibility can be a useful tool - even during challenging times.

The research - produced by CIES (The Food Business Forum) and my KPMG International colleagues - reveals that corporate responsibility and sustainability is not seen as a cost, but as an important part of business models, as well as a driver of innovation that can help build growth and profitability.

The report* created a snapshot of the views of delegates who attended the CIES World Food Business Summit held in Munich earlier this year, which focused upon how sustainability can help to build profit.

One of the findings which caught my eye - which I've seen quite a few headlines on recently - is what impact the economic downturn is likely to have on companies' commitments to sustainability.

While a total of 53 percent of respondents, at that time, believed that sustainability investment will either be put on hold or reduced in an economic downturn, the vast majority which made up this figure - some 48 per cent - reported that investment would be reduced but core areas maintained. For 36 per cent, the impact would have a neutral impact on sustainability investment, while 11 per cent stated that they would increase it.

According to Alain Caparros of the REWE Group, who was quoted within the report: “It is not a question of whether we can afford sustainability. The fact is we cannot afford not to afford it.”

Of course, there has to be a benefit to business and nearly half of those questioned (48 percent) revealed that their approach to sustainability was an important driver of innovation, way ahead of being driven by risk management, compliance or a focus on philanthropy and volunteering.

So what's in it for businesses? Mark Price, managing director of Waitrose, states within the research: “The question is not whether this is a cost, but what is the best business model to embody sustainability. You can have what I call the fit model, where you reduce operational cost to reduce product cost to gain more customers. Or you can have the sustainable model, where you invest in product innovation to attract the increasing proportion of customers who are willing to pay more for innovation.”

In a white paper produced following a meeting of KPMG/SPSL Retail Think Tank a year ago, the group looked at 'the secrets of successful retail and how to survive in a downturn' (see www.retailthinktank.co.uk). Innovation was amongst the 'secrets' we highlighted as being crucial to success if times got tough, as a key part of the organisation having the right culture to take it through difficult times.

That report highlights that sustainability and the corporate responsibility agenda is a route to innovation. And if innovation is one of the keys to surviving a downturn, surely that has to be a good thing?

*KPMG/CIES Survey 2008 - A survey into the growth and sustainability issues driving consumer organizations worldwide

Tagged as: sustainability | responsible retailing

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