Corporate social responsibility: A chance to enhance supply chains

Elsbeth_Roelofs_MVO_Nederland

All the players in the fresh produce sector would do well to avail themselves of developments in corporate social responsibility. That’s the view of Elsbeth Roelofs, a senior programme manager at CSR Netherlands. She spoke to PBUK about the many issues surrounding CSR and how they affect the produce industry during the recent Amsterdam Produce Show.

On the surface, corporate social responsibility (CSR) might not sound like the most exciting, or even pertinent, topic to affect the fresh produce sector. However, as supply chains become more connected and legislation and compliance issues around CSR increase, it’s clear that anyone with a vested interest in the industry should at least familiarise themselves with the issues surrounding CSR.

That’s certainly the belief of Elsbeth Roelofs, a senior programme manager in international corporate social responsibility at Corporate Social Responsibility Netherlands. She explains that CSR Netherlands is the world’s largest CSR business network, comprised of more than 2,300 companies, 400 of which are active in food and agribusiness.

Explaining how CSR Netherlands focus on circular and fair food chains, she commented: 

“We’re considered the knowledge centre on CSR for all Dutch companies, and we consider ourselves a coalition factory - we build up coalitions to set up innovative projects to enhance sustainable value chains.”

Her presentation focused on the trends and opportunities within international CSR, developments in its network and what support CSR Netherlands could offer delegates to do better business.

But first, a definition of what CSR is. In Roelofs’ estimation CSR follows five distinct stages.

Defensive
This version of CSR is reactive. Companies are more concerned with their shareholder value. Any sustainable and environmental practises are in place to protect their shareholder value.

Charitable
A more recognised strand of CSR and one that Roelofs believed the audience would be more familiar with. This is about companies that support social or environmental causes with sponsorship or donations. It’s not the core of the company, but a side project. Most of the time administered by trust funds or a chairman’s fund.

Promotional
CSR from a promotional, PR perspective. Sometimes people call it greenwashing. It’s how a company positions its activities with regard to sustainability and responsibility - this stance is taken to promote the image and reputation of a company. 

Strategic
How an organisation relates sustainable and responsible activities to the strategy of the company. Here, a company will develop a CSR policy; social and environmental management systems and a code of conduct. It’s more about the company itself and how it’s managed. There tends to be a CSR policy cycle within the company as well.

Transformative
Where a company not only focuses on itself, but also looks at the causes and the roots of sustainability in the system where its operates. A company that is active in this sector would not only look at its own role, but also carry out promotional activities to target any unsustainable and unethical behaviour in the system too.

So, asked, Roelofs why is it interesting - or even obligatory - for companies to do something with CSR? 

Firstly, legislation and regulation in this area is increasing. Secondly as co-operation increases and becomes more desirable within supply chains and sector, these compliance issues affect more companies. Finally, more new and innovative business models are appearing that are inclusive and circular. They actively target societal problems.

With regards to increasing regulation she said: “We can see there are more governments - in the US and in the EU - that have regulations on CSR that companies have to comply with. European companies and also companies that are importing into Europe.”

“If you look at the regulations, there are all sorts of frameworks in place: UN environmental treaties and OECD guidelines. In those guidelines there’s a chapter on the supply chain, value chain responsibility and due diligence. Which means that companies are obliged to look into their value chain, upstream and downstream, to see what is happening in terms of social and environmental issues. And if they have an influence there they should do something about it.”

It’s not only OECD countries that have to comply though. Countries that want to join also have to adhere to these guidelines. If this doesn’t happen there is a central point in each country where people can complain. Roelofs believes that development enhances CSR.

“For example, UN sustainable development goals - some of the goals are very interesting for the fresh sector. Hunger is a key topic for the UN, and health - again, both concepts that are of interest to the fresh produce industry.”

Roelofs believes that demand for CSR in the supply chain is developing. She pointed to campaigns by activist groups such as Greenpeace against Nestle as proof of this. 

“NGOs, but also customers on social media, are putting more and more pressure on companies in the value chain to abate unsustainable practises.”

Another thing that enhances CSR is sector initiatives. Several covenants, stakeholder initiatives and roundtable schemes in the fresh and agrifood sector have tried to stimulate sustainable practises. For example SIFAV 2020. One question to ask though is are a variety of certifications desirable or do they confuse the customer? But what is the alternative? 

“Well, Unilever has one,” says Roelofs. “It has a sustainable living plan with three goals. Improving health and wellbeing, reducing environmental impacts and enhancing livelihoods. Of course Unilever has a lot of power in the value chain, so if you’re an SME what should you do?

Thirdly, it’s apparent that increasingly new business models are inclusive and circular - everyone in society can participate. CSR Netherlands has networks in horticulture that focus on this.

“They have developed a vision and a guideline for evolving innovative projects,” she explained. “So for companies operating within the fresh arena - producers, growers and retail alike - we focus on growth, innovation and shared value. We look at unsustainable practises as a chance for innovation - as a business opportunity. 

“And the way do we it; firstly we analyse what are the unsustainable practises in the sector; then we form a sector coalition of companies, sometimes NGOs, or knowledge institutions that are willing to invest in a more sustainable value chain. We develop projects with these companies that are inspirational and stimulate a more sustainable value chain and also have a large potential for scaling up.”

Roelofs went on to tell the audience that there were opportunities for SMEs within this sphere. She urged them to make use of certification schemes, like the Fairtrade mark, wherever possible. She spoke about reducing waste and adding value; co-operating with your partners in the value chain and work with innovative experts when looking at business solutions to ease societal challenges.

An example she used was combating soil degradation and water shortage. She explained how a producer in Holland - Cool Fresh - wanted to improve the fertility of the soil of its pineapple growers in Costa Rica and reduce the amount of pesticides used.

Cool Fresh thought about how it could get more value out of the plant - it didn’t want to just shovel the remains of the plant into the ground. It asked whether any value remained in the plant.

Roelofs explained that when it comes to canned pineapple, the peel and crown are leftovers. She said they could be mixed with plastics to make a lightweight, but durable, material that is used in producing cars. It is also possible to extract bromelain from the pineapple remains - a protein used in the pharmaceutical industry. Finally, she pointed out how the leftovers can be used as a substrate for growing mushrooms. 

“This project that we’re trying to develop in Costa Rica looks at a technical feasibility study and a economic feasibility study. What will be interesting for the farmers? We develop pilot schemes to show the farmers how to get more value from their plants, and at the same time look after their soil fertility.”

Roelofs concluded by explaining that numerous initiatives existed in the fresh sector. The Soil Initiative is an alliance of traders, producers and retail, but also science and NGOs, all interested in setting up projects that improve the soil fertility for producing fruits and vegetables.

“In the first half year of 2017 CSR Netherlands is initiating a course in circular business models for companies and other actors in the fresh produce sector.” 

CSR might not always appear to be a top priority, but as the regulations and compliance issues affecting fresh produce develop, it will certainly pay to keep abreast of all these areas.

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