Corporate sustainability is seen by sceptics as too often being ‘more talk than action’. In this month’s Sustainability Watch, Ben Eavis, head of corporate responsibility at Sainsbury’s, spoke with Ben Cooper about how the various steering groups, reporting processes and stakeholder discussions at Sainsbury’s facilitate action rather being an end in their own right.
In the sustainability field, campaigners are quick to point out, talk is cheap. Companies should be judged by their actions and not by how loud they shout about putative achievements. But at the same time the way in which a company communicates its sustainability strategy and how it engages both internally and externally on environmental issues is integral to its approach and can say much about its sustainability ethos.
Ben Eavis, head of corporate responsibility at UK supermarket chain Sainsbury’s, agrees that sustainability is about “doing the do”. But if anyone were to characterise the company’s sustainability efforts as a talking shop, he would point them to its many actions and achievements.
Sainsbury’s has five corporate responsibility (CR) steering groups, an overall corporate responsibility steering group and a CR scrutinising committee which includes two non-executive directors. It also holds regular stakeholder engagement sessions to discuss CR and sustainability issues with external stakeholders, and has begun publishing quarterly CR updates.
Eavis points out that the sustainability function at Sainsbury’s is very “embedded” and the steering groups are vital in enabling “key operational people” to drive sustainability into the business. There around 150 people “who as part of their jobs are looking at elements of corporate responsibility or sustainability”, but the central team comprises just four people including Eavis. “We have a very small central team,” Eavis says. “With a smaller central function I think those steering groups are critical.”
The five steering groups – covering health, brand governance, climate change, community and the workplace – correspond to five guiding values which underpin the company’s CR strategy. Each group comprises “the key operational people within the business who are responsible for that value”.
The groups meet on a monthly basis and each is chaired by a member of the company’s operating board. For example, the brand governance – or ‘sourcing with integrity’ – group is chaired by trading director Mike Coupe, while the climate change ‘respect for our environment’ group is chaired by property director Neil Sachdev.
Eavis believes the high level of management heading the groups underlines their focus on action, as “they are the people who have to deliver it as part of their day jobs”.
That high-level engagement is mirrored in the overall CR steering group, which meets every quarter and is chaired by CEO Justin King. Sainsbury’s chief executive is “very passionate” about the sustainability agenda, says Eavis. Also on that committee are the five heads of the steering groups, Eavis and the director of corporate affairs. It is a “very operational meeting”, says Eavis.
On top of that there is the CR Committee, chaired by non-executive director Anna Ford, which performs a scrutinising role. King is also on that committee, which meets twice a year, along with another non-exec.
In addition, the company holds stakeholder engagement sessions throughout the year on key sustainability issues. “We host about five stakeholder discussions a year for each of our values. And we invite some key stakeholders for discussion, followed by dinner with Anna and Justin and our senior team to discuss a pertinent issue.”
These are occasions where Eavis says Sainsbury’s seeks out alternative opinions. “It can be anyone from NGOs, government, competitors, to suppliers to farmers, depending on what the issue is. It’s often very challenging in nature and one that really helps us think and define our strategy.”
He continues: “In general we have a very good relationship with our stakeholders. Of course we will always listen; sometimes we will have a different opinion, and sometimes we won’t always act upon what we hear from them. But generally we have an open door with stakeholders. They appreciate the thoughtfulness when we interact with them.”
Another notable aspect of the Sainsbury’s sustainability platform has been its recent move to quarterly reporting. The company now publishes quarterly CR updates as well as its annual report. This approach can leave a company exposed to the accusation of ‘over-egging’ its sustainability agenda but Eavis believes the move to quarterly reporting to be a positive development.
“Generally we are seeing a demand for more information and certainly an annual gap in between providing information for some stakeholders isn’t enough,” Eavis says. “As a listed company we are putting out trading updates every quarter and they have been in isolation.”
The quarterly updates, Eavis continues, are about “connecting” the trading performance with the values that “underpin” it. “It’s about connecting the two and it’s been really well received by stakeholders, particularly colleagues.”
Another contingent which Eavis says has been positive about the change is the socially responsible investment (SRI) market. “Following the launch of our quarterly reports we’ve certainly had an uplift in the level of conversations and dialogue we’re having with SRI analysts.”
However, the mainstream investment analyst community tends to be less enthusiastic about social reporting. In comparison with financial accounting, social reporting is still in its infancy. It is a complex and diverse field and one reason why some investment analysts remain unconvinced is that, despite considerable progress towards standardisation and the development of common methodologies, there is still a lack of consistency.
Eavis points to the Accounting for Sustainability initiative, in which Sainsbury’s is participating, as a possible catalyst for developing precisely that sort of common language. He suggests the initiative could help enable companies to find a means “to report in a way that is in keeping with what investors want to hear”, adding that it “could be a very useful initiative in terms of breaking through into the mainline investment community”.
Whether with regard to reporting, stakeholder engagement or internal discussion, Eavis believes the Sainsbury’s approach underpins a sustainability strategy that is geared towards action – and achievement. Among these tangible achievements, he points to the company reaching its goal of sending zero food waste to landfill, the setting-up of its Dairy Development Group as a model for spreading sustainable practices along supply chains, Sainsbury’s becoming the UK’s largest supplier of ‘freedom food’ and its progress towards achieving an ambitious target on sustainably sourced fish.