Sustainability Watch - Cornelia Diethelm, Migros
Migros's different subsidiaries take the lead on different sustainability issues
The Swiss co-operative, Migros Group, comprises possibly the most diverse portfolio of companies imaginable. For the past five years, establishing a consistent approach to sustainability across this varied group of businesses has been the task of Cornelia Diethelm, head of issue management and sustainability. Here she discusses her role and the Migros sustainability strategy with Ben Cooper.
Establishing a coherent approach to sustainability across a diversified business is a major challenge for large companies as they look to raise environmental and social standards. Arguably the more varied the operations the more stern the challenge becomes, and there can be few companies in the world with a more diverse portfolio than Swiss co-operative group Migros.
In addition to its substantial food retailing and manufacturing operations, Migros runs petrol stations, departments stores, menswear shops, electronics and DIY outlets, bookshops, fitness centres, furniture stores, banks, bureaux de change, golf courses and travel agencies. Oh yes, and a railway!
Since taking up her position as head of issue management and sustainability five years ago, Cornelia Diethelm has been charged with developing a harmonised approach to sustainability across Migros' varied operations.
Key to meeting this challenge is how the group structures its sustainability function, which appears to be a combination of top-down direction and subsidiarity.
To begin with, Diethelm has always reported and continues to report directly to the company's CEO, which she says is a key aspect of her role. "He's really my boss so I can go to him and have a talk about different issues and that is quite a strong support."
While this direct line to the boss is clearly useful, and speaks to the company's commitment to sustainability, Diethelm stresses it is not necessary all the time. "It's good to have but you cannot use it for everything. I make sure I go with the right issue to the CEO." Her position in the company structure also allows her to "go to the top management to get decisions".
At the same time, Diethelm says this is not indicative of a top-down, prescriptive approach. While the aim is to ensure all the companies achieve the "basic social and environmental requirements" to be in line with the company's sustainability policies, Migros aims to achieve this with a "flexible structure".
While there is a "core team" of around 15 people working on sustainability across the group, Diethelm stresses that the sustainability function is devolved to the individual business units.
Her team is part of a sustainability "network", and while it may take the lead by providing direction, analysis, setting up working groups and generally facilitating communication on sustainability within the group, responsibility for sustainability needs to be "as close as possible" to the individual businesses.
This not only speaks to the engagement at the individual company level, but is vital because these are the people with the "market knowledge" to make the sustainability solutions work for the specific businesses, particularly important given the group has such diversity in its operations.
As an example, Diethelm points to progress on sustainable fish. In its latest sustainability progress report, Migros reported that its range of sustainable fish has been extended, with seven Marine Stewardship Council-certified and two organic lines being rolled out. Sales of MSC-certified fish rose by 16.5% in 2011. "You need the fish procurement specialists to do that."
In fact, sustainable procurement is a key plank in the company's sustainability strategy. Migros has committed to using 100% sustainable palm oil by the end of 2015, while its Chocolat Frey range and tea brands will be UTZ-certified by the end of 2013. Sales of products with "ecological and social value" rose by 6.5% in 2011 to CHF2.3bn, even though total retail sales declined by 3.3% to CHF14.7bn.
However, while Migros has clearly shown commitment to ethical certification schemes, Diethelm stresses the importance of raising the ethical credentials of the product range as a whole, including basic items. "We'd like to make sure that every product you can buy in our stores has a social or environmental benefit," she says, adding that sustainable consumption should be an option available to all customers rather than a niche in the market.
"There are too many labels and consumers are a little bit confused about which label is a good one and which is not," Diethelm says. She believes in the future there will be fewer specialist labels and consumers will look simply to the retailer to provide a guarantee of sustainability.
The ownership of sustainability within the individual companies also allows Migros to run numerous pilot projects which can help in establishing best practice. Different parts of the business have taken the lead on different issues, Diethelm explains. "You always have some frontrunners and they are not always the same companies."
Interestingly, while she says its German operations have often tended to take a lead on sustainability issues, regarding the introduction of glass doors on refrigeration units, it was the French side of the business that had been in the vanguard.
In its most recent report, in which the company points to a 28% reduction in total CO2 emissions since 2000, Migros states that in 2010 it became the first retailer in Switzerland to roll out glass doors on cooling units. More than 50 outlets had been fitted with refrigerator unit doors by the end of 2011.
Three manufacturing units, Micarna (meat), Mifa (oils and spreads) and Jowa (bakery) conducted 'energy saving weeks' in 2011 to raise employee awareness around responsible energy use, and more of the company's subsidiaries will be following suit this year.
The fact that different companies have led on different issues has fostered the spirit of cooperation within the group, Diethelm adds.
Dialogue with consumers is also an important feature of the Migros approach to sustainability. Last year, it launched a new consumer-facing sustainability portal called Generation M.
The company also plans to increase the frequency of its sustainability reporting. Having taken the decision two years ago to incorporate sustainability reporting into its annual report - a move which Diethelm believes underlines how integral sustainability is to its overall business strategy - the company plans now to publish a specialised sustainability progress report twice a year.
It will continue to provide a summary of sustainability performance, including progress in measurable areas such as CO2 emissions and waste, in its annual report. The first six-monthly report is due to be published in November.
Collaboration with NGOs is also important. For example, WWF has a "strong relationship" with WWF. However, Diethelm believes partnership with NGOs should be based on a common interest in addressing sustainability issues and the sharing of differing perspectives. "You have to make sure that you understand the different roles, to say that we are a company, you are an NGO and it's not a problem if we don't agree on every issue."
However, NGOs are "opinion leaders" and provide an idea of how consumers will be thinking in the future, while also acting as an important "sounding board" for the company's sustainability strategies. By the same token, in dialogue a company can provide an NGO partner with insights into the market that they may not have otherwise, Diethelm adds.
Diethelm says her previous experience in the NGO sector has been useful, while she has also worked in communications and government which has helped with the issue management responsibilities that are also part of her role. She describes herself as an "all-rounder" which perhaps given the multifarious nature of the Migros empire is probably no bad thing.
Companies: Migros Group
Cooperative retailer Migros Group has booked an increase in full-year sales as it "extended" its "price leadership" in the Swiss market. ...
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