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So, how DID Marks & Spencer gain £145 million from sustainable business?

This week’s guest post comes from Tobias Webb of the Innovation Forum and first appeared in Toby’s blog, The Smarter Business Blog (in theory)

If you are familiar with the concepts of sustainable business (actually it should be “more sustainable”) and corporate responsibility then you will be familiar with iconic British-based brand Marks & Spencer.

There are probably three main reasons for this.

  • First, they’ve made serious commitments to changing their business, supply chain, and even their customers, for the better.
  • Second they have delivered on some of it, and spent time calculating the value of doing so.
  • Thirdly, they go out and talk about it. They let their people out of the office, to external events. It also helps that their people are all quite personable, articulate, and open to challenge and ideas.

This has annoyed some retail brands, who are, to be honest, often (but not always) not quite as good as them. I mean at both public relations and some areas of sustainability. One retail CEO I had a meeting with not long ago moaned to me about the Marks & Spencer boss: “If I see Marc Bolland on a stage one more time, wearing that damned suit made of bottles…” he said. He trailed off after that.

I tried asking what it was about the “damned suit” that annoyed him. He wouldn’t quite tell me. My suspicion is that he was annoyed because M&S talk about sustainability a lot, and his firm does not.

It was cultural jealousy.

(The company the CEO runs is actually quite good at a lot of the important sustainability stuff, but culturally seem unable to talk about it that much, or to be as ambitious as they might be, which is a shame)

It’s very hard to compare companies, and I’m a bit sick of other retailers sniping to me about M&S with comments such as: “they’ve got too many targets, they can’t do the really hard ones, it’s all PR” etc etc.

Yes, other retailers, they are good at PR.

So what. Their PR is pretty well done.

Get over it.

Become better yourself, and do it right, or you’ll end up like Tesco and their product carbon labeling debacle of some years ago. Or worse, horse meat in your products.

And in my view, having studied the company, admittedly from afar, for nearly 15 years, M&S are doing a lot.

A lot that others don’t do. Also a lot that others are also doing, but don’t talk about so well.

Are M&S better than, say, Sainsbury’s, who don’t do sustainability PR quite so well?

I think that is the wrong question.

Trying to work out an answer is not the best use of time. It takes us in the wrong direction. It is too complex to answer right now. There are too many variables, different inputs and impacts.

The right question is how are M&S doing versus how they were doing five years ago? Or two years ago? Particularly in tough trading conditions. (they are great at selling food, but struggling in non-food)

We’re not nearly ready to start comparing M&S and their competitors across the board.

On some policies, yes, on some comparable areas (GHG emissions per square foot, fish policy, cotton or palm oil targets, or whatever) then maybe.

But not across the board.

This is why I worry that competing to be listed by groups such as Dow Jones Sustainability Initiative can send companies in slightly the wrong direction. Strategy best comes from within, not without.

The tail should not wag the dog.

We should focus on how M&S, and other retailers, are doing today vs. yesterday and the challenges of tomorrow, how much better that might be, what they can’t yet do, and what the benefits of all this are for society, shareholders and the environment.

I’ve wanted to write the above for a while, and have done so in the past in some forms.

I feel better now. Other opinions are of course available, and your statutory rights remain unaffected.

Right, back to M&S in detail.

I recently sent Adam Elman, head of global Plan A Delivery at M&S, some questions I thought he might find a bit tricky in places (no point making it easy, I am not a PR man after all).

Below are his responses. I think they are quite interesting. But judge for yourself.

Toby: You’ve recently provided an update on Plan A progress. What are the headlines?

Adam: Plan A in 2007 was the technical plan (now business as usual for us, so better farms, factories, sourcing etc) and Plan A in 2010 was about embedding it into our ways of working (making it how we do business, so scaling across hundreds of sites instead of just trial sites, building it into board bonuses etc).

Plan A 2020 is very much moving into the engagement phase.

It’s about recognising that we can’t produce systemic change on our own and engaging with our customers, our employees and our stakeholders to help drive the change needed to make M&S a more sustainable business.

There are 100 commitments again and it takes M&S and sustainability through to the end of the decade. Highlights are:

  • M&S operations worldwide, not just the UK, now carbon neutral;
  • Launch of a Global Community Programme to increase the scale of the social, environmental and economic benefits of supply chain Plan A projects;
  • Make Your Mark extended to help 5,000 young unemployed people by 2016 and Marks & Start employability programme launched in international markets;
  • Sustainable learning stores to be launched overseas and UK stores to be adapted for future climate change challenges;
  • Energy efficiency target increased from 35% to 50% per sq ft by 2020;
  • UK stores to raise £1 million every year for local charities and plan to raise £20 million for health and well being charities by 2020.

Toby: There’s a number of cost savings attributed to Plan A. What is that overall number in 2014 and how is that broken down / calculated? Does it impress investors giving you a hard time about your non-food business?

Adam: We reported a net benefit of £145 million for Plan A in 2013/14. That takes the cumulative total to £465 million since 2007.

We calculate these numbers by looking at Plan A in granular detail, breaking it down to every level of activity we do under the Plan A banner and calculating the costs and the financial benefits.

It is important to note that there are a whole number of benefits that we don’t monetise, for example supply chain resilience, staff motivation, brand momentum etc.

More and more our investors are taking note and increasingly, in a post-Rana Plaza, Horsegate world, the investment community recognises how important sustainability is. However I think we are a long way off it being at the top of the agenda in the city. Integrated reporting is helping (we’re part of the pilot programme) and we’re very lucky at M&S to have some highly active investors in this field, for example Danny Truell of the Wellcome Trust (one of our biggest investors) sits on our Plan A Advisory Board.

Toby: Critics of Plan A say that lots of the targets/commitments are little things big retailers are doing anyhow, and the really hard stuff you don’t do, then gets lost in the detail. Fair comment?

Adam: No I don’t think that’s a fair one. I believe our track record speaks for itself – first major retailer to be carbon neutral; zero waste to landfill since 2012; 5,000 people facing barriers to the workplace now in work (Marks & Start), four million garments recycled every year (Shwopping), 100 per cent responsibly sourced wild fish, to name but a few.

All very difficult to achieve, all transformational rather than incremental change.

With Plan A we are trying to tackle all the big issues that affect a retailer of our size and these include some of the tough issues that are on the horizon right now e.g. customer use of product, transparency, youth unemployment etc.

We’ve also worked extremely hard to embed Plan A across everything we do, across all our people and across our supply base – Plan A isn’t delivered by the small number of people in the Plan A team, it’s the whole of our business working together to drive change.

We believe we’re really open about progress against the commitments (for example via our annual report and stakeholder event) and if we don’t achieve a commitment or are facing unexpected challenges, we say so and invite feedback and debate as to why.

Wood is a good example. Our original Plan A commitment was for 100 per cent the wood we use to be FSC or from an equivalent sustainable source.

We didn’t achieve it, we hit 88% by 2012. But we’ve pushed on, not given up, extended the commitment, enlisted help from industry experts as well as working very closely with our supply base and are determined to succeed.

We’re now at 96% and we’ll keep reporting every year until we get there.

Toby: Critical feedback; M&S is very good at external engagement, but too much praise is bad for anyone. So how do you use stakeholder engagement for critical feedback? Particularly with regard to stakeholder panels or advisory groups?

Adam: Agree, we welcome feedback of all types and want to be challenged on Plan A. And the stakeholder/NGO feedback we get does help shape Plan A. That’s happening, informally, all the time and there are a number of more formalised ways in which this happens.

We have an Advisory Board that includes many leaders in this field, people who aren’t afraid to tell us what they really think! Jonathan Porritt is a great example. We have our annual stakeholder conference which includes a Q&A and a number of breakout sessions to discuss specific topics in more detail.

We also partner with a number of NGOs (Oxfam, WWF, UNICEF etc) who regularly shape Plan A and our thinking on sustainability.

Feedback also comes in abundance from our employees and customers, with social media a significant listening tool for us, as well as customer focus groups and internal conferences.

Toby: You’ve made some significant commitments around having a zero deforestation commitment and are active in the Consumer Goods Forum on this issue. Why this, why now?

Adam: We’ve been working on deforestation as an issue since Plan A began and we created a specific commitment in 2010. As we become clearer on the big issues on deforestation and the real hot spots, we can target our work more effectively and start to deliver significant change in our supply chain.

Co-chairing the Consumer Goods Forum is helping enormously as we’re very clear that we can’t deliver transformational change on our own and leading with others like Unilever means our work can deliver a bigger impact.

Toby: Making money from sustainability, rather than saving on costs, what evidence is there that you have done this to date?

Our customers, employees and stakeholders expect M&S to be good in this space. Trust is inherent in the M&S brand and as a result Plan A helps us differentiate ourselves from our competitors.

That’s the competitive advantage that Plan A gives us and why we need to drive a Plan A quality into every product we sell (currently sitting at 57%).

Innovation is important here, you can never sit still, recent great innovation stories include waterless flower deliveries and Pure Super Grape skincare products, made from grape pulp used to make M&S wine.

(Latest reporting from M&S on their sustainability progress is here. It’s a nice website, take a look.)

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Thanks to Adam for the above. There are some really useful responses there. I note that the responses to the last point didn’t quite answer the question. But given it was a really tough one (how do we separate out the variables?) I wonder if it was too simplistic a query in the first place, to really answer definitively.

Did I ask all the right questions above? Probably not. Let me know what I might have queried.

Overall I think M&S is showing good progress in difficult trading conditions. It’s not easy being a retailer and an iconic brand. (say ahh everyone, but you know what I mean)

Can they improve? Of course. But I have no doubt that despite current financial results oriented bumps in the road, they will.

I’d just like more and more detail on the really hard challenges and potential solutions in the future.

I’m not the first stakeholder to say that, I know, so am looking forward to next years report.

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This guest article by Tobias Webb first appeared on his blog, The Smarter Business blog (in theory)

Toby is Founder and Managing Director of  the Innovation Forum, which focuses on sustainability and responsible business analysis and events with business, NGOs and governments.  Toby founded and ran Ethical Corporation 2001-2014. For the last six years he has also taught Corporate Responsibility at Birkbeck, University of London.

Mike Barry, Director of Sustainable Business at Marks and Spencer  is speaking at Toby’s event on deforestation and supply chains on October 28-29 in London. You can follow Mike and Adam’s Plan A journey on Twitter: @planamikebarry and @adamelman

What do you think?