M&S makes a play to become world’s most sustainable business
Plan B isn’t an option for Marks & Spencer. Head of its sustainability programme Mike Barry tells Bloomberg conference why responsible business is the only way forward for the multinational brand.
It’s a good sign when one of the world’s leading business media outlets decides to dedicate a day to socially and environmentally responsible business practice. At the Bloomberg Good Business Conference this week director of Marks & Spencer’s (M&S) Plan A Mike Barry explained why the multinational retailer takes sustainability seriously.
Barry and Livia Firth, founder and creative director of Eco-Age, were quizzed by Bloomberg TV’s anchor and editor-at-large Francine Lacqua on whether the concept of better business is at odds with increased profit.
Plan A was launched in 2007 with the ultimate goal of making M&S the world’s most sustainable major retailer. It involves ensuring every element of the company’s supply chain is socially and environmentally responsible. For example, M&S is 'working with farmers in India to develop ways of producing cotton that use less water and fewer pesticides'.
Just last month Plan A also launched its national charitable food redistribution scheme to reduce the amount of food thrown away. It now donates more food to the communities it operates in through charitable partners including FareShare, FoodCycle and Neighbourly.
So what’s all this for? What is motivating M&S to want to become the ‘world’s most sustainable retailer’?
Barry explained there are "five big business benefits":
- You’re a leaner, more productive business. We saved £160m last year through less packaging, less waste, less water – we ploughed that back into the business.
- Trust – we’re one of the most trusted brands in the UK, not just in retail. At a time when there are horse meat scandals and factories are falling down, it’s really useful to be truly trusted.
- It’s about your own employees. 25% of our employees are what you’d class as millennial now and they want to work for a business with a purpose, heart and soul. In part that's because of social media, because they’re hearing the stories about the businesses they operate in. I can’t control these channels.
- Resilience in your supply chain. It’s tough out there – you’ve got climate change happening, extreme weather events… If you’re going to keep operating a big global supply chain you’ve got to be resilient.
- Preparing for radical new business models [for example the infrastructure light, digital based ventures]. They will disrupt us if we stand still.
Speaking earlier in the day at Bloomberg HQ was Saker Nusseibeh, CEO of Hermes Investment Management. He told delegates: "We live in a short term society – it’s not just the investors; it’s all of us. Politicians are elected in five year term cycles. We live in a society that wants results now."
Nusseibeh also went on to say the concept of investing that incorporates environmental, social and governance (ESG) issues is not a new one, but has been forgotten as a standard approach to investment decision making.
Warren Buffett once said: "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes."
Citing Buffett and others Nusseibeh said: "The best investors, who belong to the old school, think in the long term... Focussing only on the short term means you want profits now. Actually, high short term profits should actually signal risk."
If I’m not looking at governance, I can’t see risk
He also emphasised how important good governance is in investing. "If I’m not looking at governance, I can’t see risk. We still don’t know everything about Volkswagen – but we sold Volkswagen because we didn’t like its governance," concluded Nusseibeh.
The task of implementing systemic change in a multinational corporation or asset management firm is no easy feat, as M&S’ Barry acknowledges: "We have done 20% of the journey to becoming a fully sustainable business. There’s 80% left ahead."
This 80% includes ensuring the company works with "better factories, better farming, better cotton fields, better forests" and strives to achieve "better recovery of products". It also involves "finding a way of ensuring every item has a good, useful, second use", but this "won’t magically happen".
"This is years and years of hard work," Barry concluded.
Photo credit: Matt Buck