Building links with all stakeholders is seen as a vital component in any corporate responsibility strategy but companies vary both in their readiness and their success in doing this. Megan Hellstedt, director of corporate responsibility at Delhaize Group, spoke with Ben Cooper about how its collaborative culture and devolved business model helps the Belgian-based retail group’s sustainability efforts.
The ‘think global, act local’ mantra is something one hears frequently from international companies keen to profit from geographical expansion but aware of the need to preserve local character and integrity.
A devolved structure, giving as much autonomy as possible to local companies, not only offers the commercial benefit of preserving local identity and rapport with customers but also appears to offer advantages in the sustainability field. This is certainly the view of Megan Hellstedt, director of corporate responsibility at Delhaize Group, the Belgian-based retail combine which has operations in Belgium, Luxembourg, the US, Greece, Romania and Indonesia.
Hellstedt heads up a corporate responsibility function at Delhaize which “mirrors” the devolved and collaborative model on which the group itself is built, and which she believes is the stronger for it.
While the company began to develop a group-wide corporate responsibility strategy in 2008, there are only three people working on corporate responsibility centrally, with two others handling communications. The vast majority of the 85 people working on corporate responsibility are based in the operating companies. In each company there are two “point people” on corporate responsibility, one a high-ranking executive who sits on the group’s Corporate Responsibility (CR) Steering Committee, and a CR manager.
The CR steering committee reports to the CEO and executive committee. In addition, there are groups of business leaders from the operating companies tasked to work on the company’s five focus areas of corporate responsibility. They work within their own organisations but also meet or conference-call regularly with counterparts from other subsidiaries.
Hellstedt believes the team’s structure is critical. “We mirror the structure of the company. The way we’ve set it up is really to embed responsibility for our CR work within the business units. It fits our company because we don’t have a strong top-down approach. We have a very collaborative approach; we have a lot of individuality and leadership at the local level. So our CR structure works very well in that sense because it brings all those local leaders together collaboratively.”
One area where local autonomy has a direct sustainability benefit is local sourcing. “Each of our companies has a strong local history and a personality and presence,” Hellstedt says, “and they are also very strong on local sourcing”. In fact, Hellstedt adds “we’ve struggled with coming up with a group focus on it because it’s so embedded locally it’s hard to measure at the group level”.
Overall, the company has identified five key corporate responsibility focus areas: responsible sourcing; food safety; health and wellness; associate development; and climate change. Since 2008, it has reported progress through annual CR reports, the third of which was published last month.
President and CEO Pierre-Olivier Beckers has stated that corporate responsibility is “one of the three key pillars” of the company’s strategy alongside profitable revenue growth and “best-in-class execution”. He is “very engaged”, Hellstedt says. “He’s personally committed to a lot of the issues. He’s very passionate about sustainable seafood for example, about our energy reductions, our climate change impact work. He reads everything voraciously, he comes in with recommendations.”
The policy on seafood illustrates how Delhaize aims to link supply chain management and sustainability, Hellstedt says, and is “a good example of where maybe someday we’d be with all our products”. The company has pledged that in the US and Belgium it will only be selling sustainably sourced seafood by 2012. The country’s operations in other countries are at a less advanced stage, “but ultimately we’re aiming for one policy across the group.”
The collaborative approach also influences how Delhaize relates to external stakeholders, notably NGOs, with the seafood policy once more providing a good illustration. “I would say the strongest partnerships we have around environment issues with NGOs are our seafood programmes,” Hellstedt says.
The company works with WWF in Belgium and the Gulf of Maine Research Institute in the US. “That’s the type of NGO relationship we do well with, when we recognise that we need you to help us on something and they recognise that by helping us they can move their issue ahead. It’s similar to how we work across the group with a very collaborative approach.”
The company may soon be adopting a similar policy on palm oil. Hellstedt says the issue is “on our radar screen” but as yet it does not have policy in this area. “We are evaluating palm oil in our private-brand products and what sort of ability we have to move to sustainable palm oil.”
Delhaize held its first strategic engagement forum on corporate responsibility last June. The idea is to discuss the challenges and opportunities for its corporate responsibility strategy with key external opinion leaders. Among the gathering, which focused on environmental issues, were representatives from the Carbon Trust, WWF, the Rainforest Alliance and the UN World Food Programme. Delhaize is to hold a second forum in Brussels this autumn. It has also placed emphasis on “pre-competitive” collaboration with competitors through organisations such as the Food Marketing Institute and the Consumer Goods Forum, Hellstedt adds.
But as it faces the considerable challenge of first measuring and then reducing social and environmental impacts across its entire supply chain, it is liaison with suppliers which is arguably most crucial.
Unlike the event last year, there will be supplier representation at the autumn forum. “Part of the reason we’re bringing suppliers in this fall is because we recognise that some of our suppliers are very advanced in their sustainability work,” Hellstedt says. “They’re doing great stuff, working back through their supply chains to cut out waste, to cut out energy use, to reduce emissions. So we admire what they’re doing and we really feel that we can learn a lot from them. And with our knowledge from the customer side, we have something to offer to them as well, so we think it is quite a strong partnership.”
Hellstedt adds that the sustainability challenge is “changing the way we do business, bringing social and environmental impacts into the conversations we have with our suppliers and building expectations around [those] impacts into our relationship with suppliers.”
For a retailer, sustainability work does not only involve looking back down the supply chain. Just as with quality control, a retailer has to be a badge of assurance for customers. Hellstedt explains that this responsibility to provide all the relevant information on sustainability criteria is perhaps the biggest challenge. “All retailers are struggling with it. The sustainability world is evolving very rapidly and there are a lot of unanswered questions.”
But if the quest for knowledge is central, it can only be fostered by the emphasis on collaboration and dialogue to which Delhaize aspires. In its mission statement the company says: “We are connected with our colleagues across the group. We learn, we grow talent and we innovate”. And it is that ethos which Hellstedt is clearly keen to see reflected in the company’s approach to sustainability.