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BUSINESS AND DEVELOPMENT
 
Driven by a shift in customer expectations
Stephanie Gray
9/27/2005
 

          Passionate advocates of corporate social responsibility say the movement is gaining as much momentum as the human rights campaigns of the 1970s. Statistics showing that certification for the Fairtrade label -- goods that are proven to have been bought from producers at better prices, benefiting 5.0m farmers, workers and their families worldwide -- has been growing by 40 per cent a year, driven mostly by consumers demanding a fairer deal for the world's poor, would appear to support their argument.
Mike Barry, head of CSR at Marks and Spencer (M&S), the UK retailer, says he noticed a big shift in customer expectations about five years ago. "At one point, customers would have expected us to build a few kiddies' playgrounds but attitudes over such issues as animal welfare, GM foods and fair trade started to harden and we have now got to be doing the right thing," he says.
It would appear that attitudes have continued to harden. Earlier this year, research conducted by M&S showed that 60 per cent of the public believes British business is not doing enough to help African nations and 80 per cent believes trade offers the best way to fulfil the continent's potential.
There is, of course, the reputational risk to be considered in a globalised world in which companies have suffered adverse publicity for the use of child labour, deforestation and complicity with political corruption. Here too, there appears to have been a sea change with the International Labour Organisation (ILO) reporting an increase in ratifications of fundamental labour standards and increased dialogue and cooperation between governments, employers and workers. Reputation aside, however, Mr Barry insists, that the company's CSR activities are driven by a business imperative rather than old fashioned philanthropy.
M&S has embarked on a supply chain pilot scheme in co-operation with the Shell Foundation, the charitable arm of the Anglo-Dutch oil company that was established after the disastrous publicity attached to the Brent Spar oil rig fiasco and its operations in the Niger delta oil-producing region of Nigeria.
Described by Kurt Hoffman, director of the foundation, as a "more enlightened way of approaching the issue of development aid" the companies are investing in, among others, a project that will see flower growers on the Agulhas Plain in South Africa given help to serve growing demand in UK stores for indigenous bouquets.
The companies say 3,000 South Africans living in poverty will be helped by the scheme that will help protect a fragile eco-system where wild plants are harvested.
The foundation developed the model after realising that many small enterprises seeking its help lacked committed customers.Under the pilot, the foundation will invest both $1.0m and business development expertise at the producer end of supply chains in developing countries for three M&S products. M&S will also contribute stafftime to review the supplier's operations and develop business skills so that it can trade profitably while respecting the environment and ensuring a positive impact on all members of the supply chain. "Producers don't want a hand-out," says Ms Jarvis, "they just want equal access to market information since they are the last to hear of customer trends. A Guatemalan bean producer recently told me that he had no idea that retail customers wanted to buy washed beans until no one bought his beans for four months. We need to overcome these sorts of issues."
The South African flower model is the sort of project that Mr Barry says appeals to M&S's individual shareholders. The big institutional investors, he admits, are "waiting on the sidelines to see how it works out".
Under syndication arrangement with FE

 

 
 

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