Book review: The Battle to Do Good: Inside McDonald’s Sustainability Journey

Mike Tuffrey, Co-founder of Corporate Citizenship, reviews a personal account of the inner workings of corporate sustainability at one of the world’s most recognisable brands.

A “sustainability page-turner” is not a description one often finds associated with books in the usually heavy-going world of corporate responsibility.  In the case of The Battle to do Good: inside McDonald’s sustainability journey, just published in hardback by Emerald Publishing, the marketing claim rings true.

Bob Langert, the book’s author, takes us on his 25 year journey from being given a “temporary environmental assignment” in the late 1980s to overcome opposition to the polystyrene clamshell, then littering America’s streets, to his retirement in 2015 as McDonald’s first ever vice president for sustainability.  Along the route we learn about chicken welfare standards, the infamous McLibel trial, Amazonian deforestation, childhood obesity, workers’ rights, much more on packaging, and many other topics too.

This journey started in denial, morphed into reactive harm-reduction on individual issues, then grew into a formal corporate strategy first agreed in 2010, and ended with a five year plan, the 2020 Sustainability Framework, with pillars around sourcing, planet, food, people and community.  That’s a journey many large companies have travelled in parallel, although few so much in the public spotlight and with so many individual customers intimately involved – 3.8 million every day served in the UK alone.

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Investors step up pressure on Global Goals

Latest research shows companies are still falling short on the SDGs, while investors move to close the funding gap. That means 2019 is the year to ratchet up the corporate act.

As the year draws to a close, the clock is still ticking loudly towards the deadline for achieving the Sustainable Development Goals – described as the closest thing the world has to a ‘strategy’. Following on from the UN Millennium Development Goals, they were ratified by 193 countries in September 2015 and have 17 goals, with 169 specific targets, covering every aspect of life on planet earth, together providing an ambitious agenda for a better world, all to be achieved by 2030.

I’ve been critical of the approach so far adopted by too many companies towards them. See ‘Let’s stop playing SDG bingo’  where I argued that simply mapping existing activity against the 17 goals to show a contribution is little more than ticking off each in turn and calling out ‘full house’. Companies should move on from this ‘pick-and-mix’ approach and show how the business is changing as a result of addressing the Goals, either in response to market trends and public policy stimulus or so as to increase the intended sustainability impact.

That said, I’m now seeing a slow up-tick in the number of companies who are going further and taking their SDG mapping back into the business with a change agenda. My test is whether they are re-engineering their own product or service portfolio to achieve greater impact or engaging with their partners across their value chain to do the same.

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Let’s stop playing SDG bingo

Progress by companies is proving patchy towards achieving the Global Goals. In a recent webinar, I discussed the need for them to embrace the logic of the business case and stop their pick-and-mix approach.

The clock is ticking towards 2030 – the deadline for achieving all 17 of the Sustainable Development Goals, unanimously adopted by world leaders exactly three years ago at a historic UN summit in New York. That may feel a long way off, but at time of writing it’s only 146 months away.

This summer’s UN progress report showed just how far there still is to go. To pick only one, the first on poverty, one in ten of our fellow citizens lives on less than $1.90 a day – the official poverty line – even if that has fallen dramatically from one in four at the start of the millennium.

Over 100 governments have now produced voluntary national reviews to report on progress at country level. However some are so late in preparing theirs – step forward the United Kingdom – that the voluntary sector has taken the initiative to produce its own stock-take: see UKSSD’s Measuring Up report issued in July.

My colleagues and I at Corporate Citizenship have been tracking what companies are Continue reading

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People are our greatest asset, at least until the robots take over

The government is rightly making firms report more about their employees. However big changes are underway in how companies organise their whole labour force, which the new approach misses, as well as the longer term trends towards automation.

New corporate reporting rules, recently released, would seem to confirm the UK government believes that old adage – beloved of CEOs in their introductions to the annual report and accounts – that “our people are our greatest assets”. (Their sincerity is rather too often swiftly undermined by descriptions of the latest restructuring for ‘optimalisation’ that follow in the management review.)

First up, in July the Financial Reporting Council released the new UK Corporate Governance Code, aiming to “put the relationships between companies, shareholders and stakeholders at the heart of long-term sustainable growth in the UK economy.” A quarter of a century on from the original Cadbury Code, the emphasis is even more on building trust and strong stakeholder relationships. See here for the highlights – all about establishing a corporate culture aligned with the company purpose and business strategy, one that promotes integrity and values diversity. Again, the talk is all about principles, applied flexibly, not a rigid set of rules.

Yet in one area, employees, the Code is highly specific. Large companies are now required to engage the workforce in decision-making, through some combination of an employee director on the board, an advisory panel or a designated non-executive director. Those with long memories will recall the firm promise by Theresa May in her July 2016 leadership bid: “If I’m Prime Minister, we’re going to change [the] system – and we’re going to have not just consumers represented on company boards, but employees as well.” Well, not quite, as it turns out. (I wrote about her u-turn on that point soon after here.)

The second big change is a set of rules about mandatory reporting each year of how Continue reading

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Purpose pays – the evidence is clear

The number of purpose-led businesses is growing,  and with it the evidence of a pay-back for business and society.

News breaks this week that the smoothie drinks company, innocent, has become a B Corp.  With its iconic products on most supermarket shelves, this feels like a breakthrough moment for the B Corp movement in the UK.  Innocent joins a roster of some 150 British firms – including Cook, Pukka Herbs, Divine Chocolate and (probably the largest) Danone UK – alongside some 2,500 worldwide.

But isn’t innocent part of Coca-Cola, asked a sceptical colleague in the office; how can they be a B Corp?  While the technical answer to that question lies in the detail of the certification process, the implication is that this has now become a proxy for an all round ‘good’ company – which only adds to expectations about the validation process.

In summary, you can get the accolade if you meet three tests.  Details vary in different jurisdictions, here’s the UK procedure.  Continue reading

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Careless talk hinders progress

When talking about the social purpose of business, loose language results in a loss of focus on the end goal – so here’s a solution.

The proposition is simple: that purpose-led businesses and brands outperform the average.  Surveys abound with data from consumers saying that, price and quality being equal, they’ll switch to cause related brands.  Unilever has become the poster-child for the proposition, reporting that last year its ‘sustainable living’ brands grew 46% faster than the rest of the business and delivered 70% of its revenue growth.

Now a group of ten stewardship investors, collectively managing $8 trillion worth of assets, have taken the question to company boards, using eight agreed questions to uncover the extent to which a company is genuinely and effectively being purpose-led.  Convened by Blueprint for Better Business, the group includes Schroders, Hermes and Legal & General.  Their proposition is that having a clear corporate purpose is a key part of creating long-term sustainable value.

This new focus on purpose raises an awkward question – I believe – for those of us working in this space about why we continue to speak a confusing language about CSR, ESG, corporate responsibility, citizenship and sustainability.  In fact, I’d go further and say it’s worse than that, as we can’t agree among ourselves what the words we use actually mean.  The biblical story of the Tower of Babel comes to mind, a collective endeavour thwarted by language differences.

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The race for impact from sports sponsorship

With record amount of money being spent on sports sponsorship, should we expect a social as well as commercial return?

At Corporate Citizenship this week, we assembled a premier league team to discuss whether sports sponsorship can – and should – have a lasting impact beyond the immediate commercial payback. Sustainability meets sports, you might call it.

Seb Coe – who chairs CSM, our sports and entertainment sister agency, and is best known for delivering the hugely successful London 2012 Olympics – joined Liz Nicholl, CEO of UK Sport, Martin George, customer director at Waitrose, and Justin King, ex CEO of Sainsbury’s where he set up that retailer’s ground-breaking sponsorship of the Paralympic Games.  Pitch referee and incisive compere was our new CEO at Corporate Citizenship, Neil Davy.

The prior question is why this matters at all. Well, in simple money terms, sports sponsorship is now a $65 billion dollar worldwide business – a staggeringly large number that’s nearly doubled over the last decade or so. And sport’s reach is huge, arguably the biggest human activity in all its forms, from jogging round the park and kicking a ball in the back yard to the Olympics watched by billions. Continue reading

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Climate risks – an opportunity for plain speaking, and taking action

An event I chaired this week prompts me to ask – is concern about global warming getting lost in an alphabet soup of new initiatives? 

Try and make sense of this…. The G20 has asked the FSB to look at GHG emissions, so they’ve set up the TCFD which is working with CDP, SASB and CDSB on new reporting guidance – that BEIS could make mandatory.

Full marks if you got all the acronyms right, you are well up to speed.  For everyone else, here’s a plain English translation.

Governments around the world are increasingly taking the risks posed by run-away climate change seriously. However they worry that the financial system has got its head in the sands, ignoring the likely impact of the big policy changes they are making in trying to shift the economy to a path compatible with 1.5 – 2 degrees of global warming. If so, current asset values could be massively overstated – anything upwards from $4.2 trillion according to one estimate – and a repeat of the global financial crash is possible when reality hits home. That matters to you and me because our pension savings are at risk.

So they want companies to start estimating the financial implications of their climate-related risks and opportunities and to disclose them in annual reports in a way that investors can act on. A taskforce headed up by Bank of England governor, Mark Carney, and former New York mayor and eponymous business data provider, Michael Bloomberg, has created a set of reporting guidelines.  These are voluntary for now, but the UK’s business department is said to be supportive of adding them to the existing rules about reporting greenhouse gas emissions if the uptake is slow.

Acronyms aside, the danger is this becomes just another reporting requirement, with Continue reading

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Do investors care about sustainability?

They say they do, but companies are not good at giving them what they need – or so I found out during a conference we held this week at my consultancy, Corporate Citizenship. 

Yesterday was a first for us at Corporate Citizenship.  We’ve been working with companies for over 20 years now, and for the first time we brought together in one room representatives of the investor community for a face-to-face dialogue with those in companies charged with explaining how they approach sustainability.  And a powerful discussion it was too, all part of our continuing Long Term Value Project.

‘IR meets CR’, we called it.  Speakers came from Schroders, MSCI, Aberdeen Standard Investments, Royal Bank of Scotland, Total, Stora Enso and more.  You can get a tweet-by-tweet account of how it went here. Some 150 people participated, kindly hosted at Chartered Accountants Hall in London by the ICAEW and run in partnership with the Investor Relations Society. It was especially pleasing for me to be back at the ICAEW: when I was training to get my accountancy qualification, these topics were not on the syllabus at all.

Our proposition was that there’s a disconnect between corporate responsibility

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’Tis the season of… too much consumption, and year end predictions

 As the year 2017 draws to a close, I’ll hazard a prediction about a rising trend for 2018 – a backlash by consumers about how companies use their data.

As I write, here in London the shops are full. Households are preparing for the Christmas season, when Christians astutely adopt the pagan winter solstice festival to mark new beginnings and everyone settles in against the cold for an excess of consumption.

If the advertisements are to be believed, high on Santa’s list of presents this year will be smart speakers – with Amazon Echo battling it out with Google Home, since Apple has announced that its HomePod will not be shipped until early 2018. New on the scene is the Echo Dot, small enough to slip into anyone’s Christmas stocking.

If you’ve not yet joined the fun (and I’m firmly resisting so far) these devices harness voice controlled AI assistants – Amazon Alexa joining iPhone’s Siri, Microsoft Cortana and Google Now out in the cloud – to give you a hands-free way to play music, control your ‘smart home’ devices, tell you the weather forecast, and much more.

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