It is often said that European companies are ahead of their US counterparts in how they view corporate sustainability, with the latter too narrowly focused on environmental impacts under their immediate control and failing to see the bigger picture. Ben Cooper found at this year’s FMI/GMA Sustainability Summit that attitudes are changing.
It is said corporate perspectives on sustainability and the strategies they beget are more sophisticated in Europe than in the US.
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Often trotted out as something of a truism, this is far from being a vague, generalised perception. At least two significant reports this year – one from sustainability advocates Ceres and analysis firm Sustainalytics and the other from researchers EIRIS – suggested the US lags behind Europe on corporate sustainability.
Of the 19 “supersector” leaders in the Dow Jones Sustainability Index (DJSI), published in September, 13 were European companies. Three came from the Netherlands, including food and beverage sector leader Unilever; France, Germany, Spain and Switzerland each provided two, while Belgium and Finland chipped in with one a piece.
And how many from the US, a nation which hardly lacks for corporate powerhouses? A nice round figure: none. And it appears to be not just Europe the US is trailing behind. South Korea boasts three supersector leaders, Australia two, with Brazil providing the other.
While it would be wrong to suggest there are no US companies with corporate sustainability platforms to rival European companies, there does appear to be something in the contention that the US corporate sector as a whole has not gone as far or as fast as Europe.
The comparison between the European and US outlook was a much discussed topic at last month’s FMI/GMA Sustainability Summit. There was a prevailing view there that the conference, now in its sixth year, had undergone something of a step-change and this was reflective of a maturing of the corporate sustainability project among US food producers and retailers.
Moreover, the influence of European companies and admiration of European leaders in the field, such as Unilever, was seen as a significant factor in this evolution.
In fact, Jeanne von Zastrow, senior director of sustainability and industry relations at the FMI, singled out the “perspective and expertise” which Samantha Wilding, a British sustainability specialist working for Belgo-American retailer Delhaize, as particularly significant in shaping a more sophisticated conference agenda. Von Zastrow said there were more “leading-edge” people among the delegates and speakers, including Europeans who had not attended before.
Von Zastrow said the more sophisticated agenda was indicative of the “maturing of our industry and the maturing of our sustainability people” who, having addressed the ” low-hanging fruit”, were “really having to get into the tough stuff”.
So what is the tough stuff?
There are several inter-connected dynamics in play. Probably influenced by US as well as European pacesetters, the sustainability agenda among US food producers and retailers is clearly broadening. Companies did initially focus on environmental impacts within their operations – the so-called low-hanging fruit that provides immediate cost benefits and is a very easy sell to the ‘c-suite’ – but the discussion is increasingly moving to the entire value chain, the life cycle of products, including how consumers use them and dispose of them, and in particular the supply chain piece.
Von Zastrow spoke about the journey member companies had been on. Focusing on the low-hanging fruit was an “essential pathway” for companies and their sustainability professionals, she said.
Kai Robertson, director for food, beverage and agriculture practice at sustainability consultants BSR, has seen “a shift from the four walls”, which was “a logical progression”. Robertson added: “There’s been more emphasis on supply chains”.
Delegates and speakers also spoke of the general emergence of a broader notion of economically sustainable corporate citizenship, integrating responses to both social and environmental impacts.
Most of the low-hanging fruit is in the environmental space so that is where the focus had been. Notwithstanding some high-profile reputational issues, social issues had been a lower priority. They have a longer-term or less tangible pay-off and are therefore harder to justify from a business perspective. But perceptions are changing. Some referred to following European models; others simply to an adoption of a more sophisticated view of the triple bottom line.
Sylvain Cuperlier, vice president for worldwide corporate responsibility and sustainability at Dole Food Co., said there were signs that a more “integrated” view was being adopted. While there was still a lot of focus on environmental issues, Cuperlier said there was also discussion of how companies can “further integrate labour issues into the concept of sustainability”.
However, not all were so effusive. “Sustainability has got to embrace environment, it’s got to embrace labour and it’s got to bring in the economically sustainable dimension,” said Oxfam America’s Peter O’Driscoll, “but you don’t see those three interests represented in the right proportion here [at the conference]”.
O’Driscoll said it would be “a bit uncharitable” to say companies were still just picking off the low-hanging fruit. “What I would rather say instead is that I am seeing the beginnings of an acknowledgment that the sustainability definition has got to be broadened.”
However, Robert ter Kuile, senior director, environmental sustainability, global public policy at PepsiCo, said he had seen “fantastic examples” during the conference of companies who “get” the idea of an integrated view of sustainability. “They understand it, they are implementing it and benefiting from it,” ter Kuile said.
Meanwhile, Mark Gale, president of reputation management consultancy Charleston Orwig, said the conference had a “very global” outlook, indicative of changing perceptions in the US around sustainability and a more international outlook.
There was, perhaps not unsurprisingly, some divergence in perception about whether the conference had an international flavour or not. In fact, there were many speakers, panel members and delegates from outside the US. However, while American delegates tended to gasp at the amazing international profile, if one asked the Europeans present they would suggest the conference was very US-centric.
On balance, there is probably sufficient evidence to suggest the prevailing take on sustainability among US food companies is shifting.
But, as O’Driscoll pointed out, it is a “big leap” to extrapolate from one industry-specific conference a major shift in the “broader consciousness” of the US corporate sector regarding sustainability.
However, encouragingly perhaps for those wishing to see a few American names among the DJSI supersector leaders in the coming few years, he added: “I think there are some opportunities. We’re doing what we’re doing because we see some opportunities in this respect with big American companies. There’s a lot of things we can say about what is wrong environmentally and socially in their supply chains but I do think there’s an increasing openness, for whatever reason, enlightenment or business risk motivation.”
Ultimately, O’Driscoll didn’t want “to go down the road” of comparing the US with Europe, but like von Zastrow he did use the journey metaphor in the context of where US companies are on sustainability. He just clearly feels they are less advanced on the journey than others.
The joy of that metaphor is that it can be said that wherever you are on the journey the critical factor is that you are moving forward, even if that is sometimes a last resort when progress is slow. So the US food sector might be best judged not at this conference but at one in six years’ time when it should be clear whether we were hearing a change in rhetoric last month or something more substantive.
