With a reputation as a sustainability leader in the private sector, UK supermarket Marks & Spencer boldly declared its aspiration to become the world’s most sustainable retailer by 2015. In its 2012 sustainability report, “How We Do Business”, the company set its sights on making its supply chains socially equitable and environmentally sustainable by 2020, with sustainability standards and certification figuring strongly into these plans.
To this end, M&S is aiming to source 50% of its cotton from either Fairtrade, organic, recycled or Better Cotton Initiative sources by 2020; it has developed a programme for sustainable food packaging building on Forest Stewardship Council standards; and it is working with WWF to ensure that all of its fish products are either Marine Stewardship Council Certified or from fisheries working to improve their practices.
Despite the success, M&S has also had to acknowledge when its sustainability progress has been slower than intended, owing, for instance, to decreases in consumer demand (in the case of organic foods) or to shortages in certified supplies (in the case of sustainable timber). Addressing these challenges and working with businesses to move certification into the mainstream was a theme of ISEAL’s June conference and there we caught up with Fiona Wheatley to discuss how the picture is changing for the use of sustainability standards in the retail sector.
Fiona is the Sustainable Development Manager for M&S, responsible for sustainable raw materials and their associated supply chains.
2012 marks 10 years of the ISEAL Alliance. Drawing on your experience in the retail sector, what have been the main challenges over the last decade for sustainability standards and what are the difficulties facing retailers today?
To start with the challenges, the wider economic situation is having an impact and, unfortunately, a couple of certification schemes have suffered quite badly as consumers have been forced to tighten their belts. Organics would certainly be put in that category within our UK market. The price premium associated with organic produce, particularly livestock, makes it very difficult for customers to buy on a whim. It takes quite a serious degree of commitment by consumers to buy organics in the current economic climate.
Inevitably cost is an issue and this is unlikely to change. In reality, sustainable products aren’t always more expensive but they are often perceived to be and perceptions are very difficult to shift. There is also an additional complexity in that, bizarrely enough, even when the price is not affected by a sustainability claim customers often assume that the product is either going to be more expensive, or that the retailer has given it an added mark-up.
On the business side, the cost of supply chain certification is a real issue. The costs really mount up when any individual party has to undergo the full range of audits that can be necessary for a product range. This is a particular problem for our food business, as many of the products we sell contain multiple ingredients, and each certification scheme requires their own bespoke audit.
An ongoing challenge is credibility. Despite the fantastic work undertaken by many standard-setters and multi-stakeholder initiatives, campaign group criticisms can be very damaging: they undermine consumer confidence in schemes and impact negatively on business commitments. However, mainstream campaign groups are increasingly appreciating that while certification schemes are not perfect, they are progressive do make a difference. For that reason, campaigners are being less vocal, at least publicly, with their criticism.
And what have been the areas of growth, in the retail sector, for sustainability standards?
Growth has been remarkable although it’s still frustrating that we have not quite achieved the market penetration that we would all want as environmentalists and concerned producers, consumers and partners. However over the last five years in particular, market familiarity and endorsement of the really big schemes, FSC, MSC, and Fairtrade for example, has been astonishing. It’s actually becoming difficult to buy goods like coffee, tea and cocoa on the UK market that aren’t certified. One example of this is the triple certified coffee served in M&S cafes where coffee is certified to Fairtrade, organic and Rainforest Alliance standards. I don’t think anyone would have predicted that ten years ago.
Another achievement has been the professionalism and levels of market engagement with sustainability standards, which is a credit to the work undertaken by standard setters. If we look back ten years ago, there was a perception that the schemes didn’t really understand business. But those critics have been proven wrong by a thorough and strategic approach by certification organisations and, more importantly, the individuals within them. This has led to the strengthening of relationships with major global businesses that was not anticipated ten years ago.
At the ISEAL conference you talked about how the future of standards will move away from on-packet labels and business-to-consumer relationships and more towards a business-to-business relationship. Could you explain this a little bit further?
On-pack labels definitely play a part. They have a role in giving the leaders who are prepared to invest in certified sustainable procurement a way to demonstrate their commitment and investment. However, in a mature market where a high proportion of the mainstream offer is certified, this becomes much less applicable. The other issue is when just part of a product is certified, such as soy, palm oil or sugar. These are often minor components of the overall finished product and I believe it would be inappropriate to make a product claim under these circumstances.
Also, while consumers appreciate these labels and what they represent, it’s apparent that this appreciation does not drive product selection over price, quality and convenience considerations. But it’s important to not use the absence of consumer drive as an excuse to do nothing. Customers expect business to do the hard work for them, and responsible businesses value the social and environmental expertise that certification organisations offer. We must continue to work with suppliers to motivate best practice and I believe that procurement standards that specify sustainability attributes are an effective way to keep the agenda alive right through the value chain.
This move towards business-to-business relationships should be seen as an opportunity which has the potential to drive improvement in a more efficient, cost-effective and faster way than we have conventionally done through the product claim mechanism.
Harmonisation of standards was a major theme at the ISEAL conference. Why, in your opinion, is this important for the future of standards, in particularly in relation to the retail sector?
There are two elements of sustainability standards that I think would benefit from harmonisation. The first is the supply chain certification systems, or chain-of-custody, and to me it is an obvious one. End-manufacturers are suffering from total audit overload, which doesn’t add any value to producers or customers and adds very little value to certification schemes. However, what it does add is a lot of cost complexity and frustration.
Fundamentally, the audits are a key way of controlling the integrity and volume of raw materials but these could easily be covered by existing audit protocols, especially in the food area. What that would look like in the future still needs to be explored but it’s something that should be explored with some urgency as it will help manage the cost base of certification and encourage good uptake.
The other element that would benefit from harmonisation is the production standards – the social and environmental performance on the ground. Now these are much more challenging, but I am confident there are enormous opportunities for efficiency gains through sensible and credible harmonisation. I am delighted to see a number of progressive certification organisations are already tackling this and would urge others to follow their lead. From a retail perspective, if we don’t drive these efficiencies in certification systems, the whole process will stall. More importantly, the potential benefits to producers may never be fully realised. Facing this now and developing plans for the future are critical to prevent this.
Fiona was a panellist in two sessions of the ISEAL Conference. Click below to read more about them:
- New Standards Enthusiasts: The Role of Governments in Scaling up
- Collaborate and Innovate: Where the next generation of sustainability standards will go
Fiona Wheatley is the Sustainable Development Manager at Marks & Spencer.
Marks and Spencer is an international multi-channel retailer with over 700 stores in the United Kingdom and another 300 stores spread across more than 40 countries. The M&S offer covers clothing, home and food products and the company has an annual turnover of almost £10 billion.
The Marks and Spencer goal is to make sure key raw materials come from the most sustainable sources available. As Sustainable Development Manager Fiona leads their strategy to deliver this goal, which covers materials bought for internal use across construction, marketing and business operations as well as those used in our product offer.
She has worked in this area for almost ten years and has a history of success in improving the environmental and social footprint of retail product supply chains. Fiona previously worked for Sainsbury’s, a major UK grocery retailer, where she introduced progressive sustainability policies for seafood, timber and palm oil sourcing.