Sustainability Rises to the Storefront
Sustainability has risen to the top of the heap in business discussions over the past several years, perhaps due to the fact that many industries are realizing that political and consumer pressure are driving them to work towards this concept, like it or not.
Meanwhile, companies such as Migros in Switzerland, long ago embraced the concept and are pushing the envelope even further now. Claude Hauser, Chairman of the Board of Migros, detailed some of his company's efforts at the just-concluded FMI Midwinter Conference. Here are a few highlights:
Background
Migros is the largest retailer in Switzerland, a country with a population of 7 million whose people speak four languages, have a high standard of living, and are environmentally aware. Consequently, discounters have been a small factor so far in this nation, and consumers are willing to pay higher prices than in other countries.
Migros is a federation of 10 cooperatives with 80,000 employees. Ninety percent of the items carried are private label and the company is highly integrated - operating 600 supermarkets and 15 manufacturing plants, along with a bank, gas stations, department stores and a travel agency. The company mission includes cultural, social and ecological commitments. They treat their employees well (i.e. providing each a minimum of five-weeks vacation) and seek to establish long-term relationships with suppliers.
Some of Migros' sustainability initiatives include:
- Transportation - 35 percent of their goods are shipped by railroad, which they say pollutes at one-third the rate of trucks.
- Shipping - cardboard boxes have been replaced with reusable plastic shipping trays - now 8.3MM in circulation.
- Store design - some stores are heated using warmth generated from freezers, lighting, and computers.
- Health - sell "Actilife" products, which include dietary supplements, help their customers get involved with sports/active lifestyles, and consult consumers on nutrition.
- Labeling - a wide variety of products now have special logos indicating whether the paper comes from sustainable wood sources; whether items are environmentally friendly; whether seafood comes from sustainable sources, etc.
In addition to Migros' internal efforts, they work with a private sector body called "EUREGAP" (www.euregap.org) that certifies agricultural products in terms of social and environmental compliance. The organization currently has 30,000 certified producers. And, Migros is part of BSCI - the Business Social Compliance Initiative (www.bsci-eu.org), an organization that works with European retailers and suppliers to monitor social standards - setting a common standard for employment practices on issues like child labor.
Discussion Questions: Based on Mr. Hauser's presentation, it would seem that Migros, in particular, and Europe, in general, is ahead of most U.S. retailers on sustainability. Will Wal-Mart's efforts lead other retailers to address sustainability issues in a comprehensive way? What retailers in the U.S. are working in this area and what are they doing?