Sustainable development a business reality, says report
years according to a new PricewaterhouseCoopers report - an issue
that the food industry must positively address.
Indeed, the challenge of creating strategies that meet immediate needs without sacrificing the needs of future generations is already here, with consumers increasingly conscious about which companies have been quickest to adapt their practices.
What's more, the global food industry finds itself at the cutting edge. Exploitative sourcing is now a mainstream issue, while the dramatic growth of fair trade is pulling food consumption out of the cost-is-all bracket, with consumers prepared to pay more for guarantees of fair labour practices and sustainable sourcing.
Products marked 'natural' or 'organic' are flying off the shelves, with fair trade sales in the UK, alone, growing by more than 40 per cent a year.
PricewaterhouseCoopers suggests that this overall trend is being driven by the growing influence of six major trends: global market forces; revisions in corporate governance; high speed innovation; large scale globalisation; evolving societal requirements and communication.
"Sustainable businesses balance their economic interests with the need to be socially and environmentally responsible," said Sunny Misser, PricewaterhouseCoopers global leader of sustainable business solutions.
"The companies that succeed over the long term are those that integrate ethical considerations into company decision-making, and manage on the basis of personal integrity and widely-held organisational values."
Misser advises that the business sector needs an elemental approach integration, action and communication. First, companies must formulate a clear strategy for behaving responsibly and integrate that strategy within their core business operations like a gene that is encoded in their DNA and copied to each cell in the corporate body.
Second, they must adhere to the values and standards they have articulated for themselves. Long-term sustainable performance does not come from proclaiming a code of conduct but from putting it into daily action.
And last, they must tell the world clearly what they are doing both their successes and their challenges. Only then can they close the gap in perceptions, maintain their reputations and act as an example to other organisations.
The food industry is a good example of why this is so important. Consumers are becoming more and more ethically aware. According to Pejling, the magazine of the Swedish Dairy Association, seventy per cent of Swedish consumers have a 'personal blacklist' of products and companies that do not meet their personal standards for social and environmental responsibility.
In addition, a survey by Market & Opinion Research International in the UK revealed that as many as one-fifth of the UK population boycott or select goods on social grounds. Similar statistics are found in many countries around the world.
"Sustainability has moved from the fringes of the business world to the top of the agenda for shareholders, employees, regulators, and customers," said Misser. "Any miscalculation of issues related to sustainability can have serious repercussions on how the world judges a company and values its shares."
Nestle for example, which has miscalculated badly in the past, has worked hard to shake off its reputation as an uncaring corporate behemoth. Last year Nestl UK became the first of the four major coffee roasters to offer a fair trade product line.
Along with Groupe Danone and Unilever, Nestl is also a founding member of the Sustainable Agriculture Initiative Platform, a 19-member strong food industry body that supports the development of agricultural practices that preserve current resources and enhance their efficiency.
There is mounting evidence that companies that act in a responsible manner consistently do better in the long run. Research by PricewaterhouseCoopers shows that more than half of institutional investors and analysts believe that good governance and disclosure about sustainability issues are critical indicators of a company's value.
PricewaterhouseCoopers provides industry-focused assurance, tax and advisory services for public and private clients. The sustainable development report, entitled Corporate Responsibility: Strategy, Management and Value, also includes reviews of regional issues, highlighting key trends that will drive sustainable development.
