The winners of Ethical Corporation’s awards for 2013 demonstrate how sustainable business can shine

In June, 250 executives and sustainability professionals gathered in London for Ethical Corporation’s 2013 annual awards ceremony. This year featured another nutritious crop of industry-leading initiatives, programmes and campaigns.

Enjoying particular success was Natura, the Brazilian beauty and personal skin care direct sales company. Natura picked up two awards in the Best Supplier Engagement and CEO of the Year categories.

Natura was singled out by the judges for its conceptually ground-breaking supplier engagement programme, known as Strategic Sourcing TBL. Launched in 2010 as a pilot programme and now covering 110 Natura suppliers (half of its supplier base), Strategic Sourcing TBL aims to account for, and evaluate, the socio-environmental performance of supplier operations.

One of the outcomes of Strategic Sourcing TBL has been that Natura now factors in socio-environmental cost when making decisions around supplier selection. According to Natura, suppliers are chosen based on a “shadow price” that includes both the price provided by suppliers as well as the socio-environmental costs and benefits of their business operations.

Supplier evaluation is undertaken annually. Developing the methodology and indicators was no easy task, says Natura. It involved placing a quantifiable value on specific externalities such as CO2, as well as determining the social value of factors such as education and employment of the less able.

Natura estimates that the socio-environmental benefits of picking suppliers who are high sustainability performers was worth more than $200,000 in 2011 and $800,000 in 2012, and is likely to exceed $840,000 per year over the next four years.

With a similar emphasis on the supply chain, the winning company in the Best Private Company category was Mars. It was recognised by the judges for its comprehensive work towards sustainable cocoa sourcing in the form of the company’s sustainable cocoa initiative.

As part of the initiative, Mars, in partnership with IBM and the US Department of Agriculture, has sequenced the cocoa genome to provide public information for breeding healthier, more productive cocoa plants with greater resistance to pests and disease.

Mars has committed to buying all of its cocoa from certified sustainable sources by 2020, and in 2012 became the world’s largest purchaser of certified cocoa, buying nearly 90,000 tonnes.

Increasing cocoa plant yields has been the major objective of Mars’s sustainable cocoa initiative, says Barry Parkin, Mars chief sustainability officer. “Our diagnosis is the product and yield of cocoa. When you benchmark it against other crops, the yield of cocoa has stayed at half a tonne a hectare for the last 100 years. If you can improve the yield of cocoa, all the other issues start to get solved.”

Mars has, accordingly, set a target to work with 150,000 farmers in Ivory Coast in order to triple cocoa yields to up to 1.5 tonnes of cocoa per hectare.

“We have demonstrated in multiple places around the world, at scale, that tripling the yield is entirely feasible. It just requires better plant material, coupled with fertiliser and training to farmers,” argues Parkin.

This prompts a question: if yield improvement is achievable, why has progress been so slow?

Collaboration is, says Parkin, the missing ingredient. “We’ve recently mapped the number of cocoa initiatives and we‘ve found over 110 cocoa initiatives taking place over the last five years. That’s the issue – the majority are small scale, pulling in slightly different directions and very few are tackling the real issue with the right package of solutions.”

Parkin’s call for joined up efforts in the cocoa sector reflects wider industry predictions of heightened business to business collaboration in the next two to five years. “There’s great evidence that partnerships are happening up and down the value chain. That’s helpful, but it’s not enough. It needs partnership across the value chain with competitors,” he says.

Technology solutions

Following in Mars’s and Natura’s footsteps, three other award winning companies – Unilever, Roshan and Vodafone – have shown how technology is increasingly unlocking social, environmental and developmental challenges.

Winning in the Best Business to Business Partnership category were Unilever and Vodafone for the development of an Ecotab application that connects smallholder farmers in Turkey directly with Unilever’s field-audit staff.

The Ecotab application is part of the Unilever Lipton Tea brand’s sustainable agriculture project in Turkey. As part of that initiative, Lipton aims to have all the tea sold in Turkey sourced from Rainforest Alliance Certified farms by 2018.

The Ecotab application applies Vodafone’s mobile technology expertise to eliminate inefficiencies in auditing and certifying farms in Turkey. Under the previous system, audit data was recorded, collated and archived manually. The Ecotab application replaces this paper-based process with a digital process carried out by regional field-based audit teams on iPads.

“The main challenge was the adoption and transformation process from pen and paper to tablets. Until the Ecotab project, auditors were using traditional techniques for data tracking and field operations. With Ecotab, they started to use tablets instead of paper,” says Engin Aksoy, Vodafone Turkey enterprise business unit director.

According to Unilever and Vodafone, the benefits of the new digital system are multiple. One day per week per auditor has been saved and, by eliminating data rekeying, Unilever is able to use 14 full-time staff at head office more productively.
For Shainoor Khoja, director of public affairs at Roshan, technology has a pivotal role in social and economic development. “Technology is leapfrogging emerging markets into the 21st century,” says Khoja. “At Roshan, we’re trying to integrate technology to help alleviate poverty, but in ways that are related to our core business competencies.”

Winner of the Sustainability Commercialised award, Roshan is the largest telecoms provider in Afghanistan. It is 51% owned by the Aga Khan Fund for Economic Development, and social and economic development are integral to the company’s business model. It has been using its mobile technology to increase access to vital services lacking in Afghanistan. 

In 2011, Roshan became the first company to launch a mobile money product, M-Paisa, in Afghanistan. In a country where 97% of the population remain unbanked, M-Paisa provides a means of distributing and receiving salary payments, paying bills, shopping and transferring money.

“If you tried to build bricks-and-mortar banks across Afghanistan, it would cost a fortune. With an average Afghan earning capacity of $2 to $3 you’re never going to make it cost effective or get a return on investment. The mobile phone allows you to do that far cheaper and far quicker,” says Khoja.
More than one million customers now use the M-Paisa service with $4m of salary payments being made through the system each month. The system has also proved itself effective in helping to curtail corruption, particularly in the payment of salaries to the Afghan National Police service.

Employee and consumer engagement

Winning this year’s Best Employee Engagement category was Western Union, which impressed the judging panel for its effective two-way dialogue with employees. 

In 2012, Western Union launched its first employee shared value competition, which resulted in 71 revenue-generating product ideas from employees around the world. The company is currently working to bring the winning idea to market. 

Turning to consumer engagement, and Neal’s Yard Remedies was winner of the Best Consumer Engagement category for its Bee Lovely campaign. Now in its third year, the Bee Lovely campaign seeks to highlight the deadly impact of neonicotinoid pesticides on pollinators.

Neal’s Yard Remedies engaged consumers through a joined-up campaign combining social media, petition signatures, cause-related marketing and customer donations. The campaign secured 117,000 signatures in support of a ban on neonicotinoids as well as raising £50,000 for bee-friendly charities. 

In February 2013, Neal’s Yard Remedies took its petition to Downing Street, adding the company’s voice to European-wide campaigns supporting an EU ban on neonicotinoid pesticides. By the end of April, 15 EU member states voted in support of a European-wide ban on their use. A final decision on an EU-wide moratorium now rests with the European Commission. 

“Having an acknowledgment from the EU on this serious issue was just what the campaign needed. Our Bee Lovely Campaign gave us the chance to talk to our customers about a serious issue, and really engage with them on a subject that we are so passionate about,” says Nicola Nolan, head of communications at Neal’s Yard Remedies. 

NGO, campaigns and community investment

Other winners this year included 350.org for the Stop the Keystone XL Pipeline campaign. Best SME was won by Kebony, the Norwegian wood brand and marketing company, for its efforts to tackle tropical deforestation through its wood modification and treatment process. 

Picking up the award for Best Business NGO partnership was the HP & Clinton Health Access Initiative for its partnership on early infant diagnosis of HIV and other diseases. The 2013 judges were impressed by the use of HP’s core competency to generate positive and meaningful change on a large scale, outside of its own sphere of business.

Public Health was also the basis of Alliance Boots’ victory in the Best International Community Investment category. Through a process of stakeholder engagement, Alliance Boots developed a computer system designed to help join up international cancer research programmes for the benefit of cancer patients. 

The Co-operative Group stood out for winning two categories: the Best Domestic Community Investment category and Sustainability Report of the Year. The Co-op impressed the judges for its community investment programme and for its material, honest and comprehensive sustainability reporting. 

Indeed, across the board, the standard of entrants impressed the judges – an indication, no doubt, that the sustainable business sector has much to be proud of.  

CEO of the Year: Alessandro Carlucci, Natura

Adding to his company’s award success in the supplier engagement category was Natura chief executive Alessandro Carlucci, who was voted CEO of the Year.

With a turnover of $3.2bn in 2012, more than 6,000 employees and 1.2 million consultant resellers, the Brazilian beauty and cosmetics company has become recognised for its commitment to sustainable sourcing in the Amazon.

Under the leadership of Carlucci, the company has committed itself to sourcing 30% of its raw ingredients from sustainable sources in the Amazon – part of a much larger, long-term Amazon programme targeting 10,000 small producers and seeking to invest R$1bn (£293m) in the region by 2020.

Carlucci joined the company straight from business school in 1989. He has worked across the organisation in various positions including five years as head of sales for Brazil and, from 2000, as head of international sales. In 2005 he was appointed CEO, one year after the company went public.

Carlucci says: “Both awards are the result of the commitment of our employees, our consultants, our partners, our suppliers and all those that helped build Natura.”

Head of Sustainability of the Year: Andy Wales, SABMiller

Winning this year’s Head of Sustainability of the Year was Andy Wales, senior vice-president for sustainable development at SABMiller.

A World Economic Forum young global leader and a member of the Global Agenda Council on Water Scarcity, Wales leads SABMiller’s approach across its 10 sustainable development priorities.

Water use and enterprise development are two of those 10 priorities, and under the leadership of Wales, SABMiller has sought to minimise water use in its own operations, as well as to protect watersheds and boost groundwater levels through its water futures initiative.

The company has made good progress on both: absolute water usage is down by 16% (despite an increase in production volumes) and the company’s water futures initiative – launched in 2009 – is currently active in eight markets.

Progress has also been made on promoting local enterprise. SABMiller has prioritised local sourcing and committed millions of dollars to entrepreneurship projects around the world. In 2013, the company hit its target of sourcing 52% of the agricultural crops used by its Africa division from within Africa.

Some $6m was invested in programmes to foster entrepreneurial activity and create support networks for micro and small enterprises. “We do all of this because it makes business sense. Where societies and economies thrive, our business also thrives,” explains Wales.

Predictions for the next two to five years? “We will see a move away from purely sectoral approaches to issues,” Wales says. Instead, look to bigger, cross sectoral but geographically specific collaboration platforms, he argues. “You will also see a better alignment of sustainable development objectives and corporate strategy, as recognition increases that aligning these two is the only way to secure long-term growth.”

CR Strategy  Ethical Corporation Awards  Responsible leaders  Rob Bailes 

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