This wiki will look into Corporate Social Responsibility (CSR) within the UK supermarket sector. Over recent years CSR has become increasingly important to the general public, as they have become more environmentally aware, and more interested in where food has come from, how it is being produced and how far it has been transported. These are now major concerns for that of the some consumers.

The Supermarket Sector

The supermarket sector has become increasingly competitive in recent years. It has estimated sales worth of £1.74 billion in April 2014, increasing by 2.8% from 2013(Sexton, Rob 2014). The supermarket industry is dominated by 4 firms: Asda, Sainsbury’s, Tesco and Morrisons (Tejvan Pettinger, 2014). The pie chart below shows overall ownership of market share within the industry. The percentage of market share each supermarket owns makes this an oligopolistic industry.

pie chart.png

(Tejvan Pettigner, 2014)

In recent years there has been an overall increase in profitability. Walmarts profits rose in 2010 to $3.78 billion along with Sainsbury’s and Morrison’s they now control 75% of the billion pound UK grocery market (BBC News 2006). This shows the scale of which these supermarkets are now competing on. In 2004 it was reported that £1 of every £8 spent in the UK was spent in Tesco.

However, the profit increase has not been universal. According to the Sarah Butler (2014) Asda’s performance has outshone that of Tesco and Morrisons who both saw a decrease in their profits. Sainsbury’s profits have also decreased, and a rise from lower priced retailers Aldi and Lidl are forcing other supermarkets to slash prices even more (Butler, Sarah 2014). This behaviour, in economic terms, is known as a price war and is common in an oligopolistic environment.

In this particular market the price war has the effect of reinforcing the idea that supermarkets are competing only on price. However in direct contradiction of this Waitrose, who have to a large extent avoided this price war, have seen their market share increase by 6% in 2014 (Robinson, Martin 2014). Waitrose is seen as a more prestigious supermarket whose main considerations are the quality of their food and concern for consumers and their employees. If we consider this in conjunction with an increase in consumers shopping at local grocers, we can see that some consumers are attracted by more than just price. Consumers are clearly becoming more concerned about where they buy their food from, forcing these supermarkets to become more socially responsible in a number of different ways.

Corporate Social Responsibility


Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (Holme, Richard; Watts Phill 2000).

The development of CSR strategies is becoming more important for multinational companies as the general public are becoming concerned over the activities of large corporations(Burchell, Jon 2008).The amount of negative press in recent times concerning what is perceived to be non-socially responsible behaviour by many clothing and food brands, such as Primark, Nike and Bernard Matthews, has forced these companies to consider CSR strategies in order to protect their brand image.


CSR Theories

The Four Part Model

pyramid.png

(Unknown, Smartbiz no date)

Archie Carroll in the 1970’s looked into the nature of corporate social responsibilities and proposed the four-part model. Carroll offered the following definition:
‘Corporate social responsibility encompasses the economic, legal, ethical and philanthropic expectations placed on organisations by society at a given point in time. ‘
He regards CSR as a multi-layered concept, which is differentiated into these four inter-related aspects. The different layers within the pyramid are required for ‘true’ social responsibility (Crane, Andrew; Matten, Dirk 2007)

- Economic responsibilities entailing companies to consider its shareholders, employees and customers. Shareholders must be given reasonable returns on their investment, employees need safe and fairly paid jobs and customers demand quality products at a good price. This criterion is therefore the first responsibility in order to be a properly functioning and stay in business.
- Legal responsibilities of a firm are to ensure the firm operations are acting within the law.
- Ethical responsibility makes sure a business is doing what is right, just and fair even if legal framework does not compel them to do so.
- Philanthropic responsibility is a business choice. It is at the corporation’s discretion to improve quality of life for employees, local communities and society as a whole.

This four-part model is helpful when explaining the different responsibilities of a company, however it does not acknowledge the real demands that are put on a company in order for it to be legal and, importantly, profitable. Crane and Matten (2007)describe the diagram therefore as fairly pragmatic. In addition they pick up on the fact that the pyramid does not adequately address the problem where two or more responsibilities may conflict. Crane and Matten (2007) use the example of a plant closure causing job losses, which then can raise the problem of balancing economic responsibilities to provide secure jobs for employees. (REF)

Stakeholder Theory


The stakeholder theory of the firm is probably the most popular and influential theory to emerge from business ethics (Stark, A 1994). This theory looks at the different groups to which a corporation has responsibility. Freeman, R.E. (1984) described a shareholder as:
Any group or individual who can affect, or is affected by, the achievement of the organisations objectives.’
A more precise explanation of the stakeholder theory, and how it relates to CSR was later provided by Evan W.M. and Freeman R.E. (1993). They suggested two simple principles:
- Corporate rights, which demands that the corporation has the obligation not to violate the rights of others.
- Corporate effect, companies responsible for the effects of their actions on others.

These theories were the first ideas that the main stakeholder for a company is not always the shareholder, and that they’re a number of different groups that are influential towards a businesses success. In regards to CSR, a company should be socially responsible to each of its stakeholders for the following reasons:
- Customer, they are the people buying the product. Being more socially responsible could increase sales,
- Employees, looking after the people who work for you could make productivity better,
- Shareholders could mean higher investment for return of higher dividends.

Supermarkets and CSR


In recent years supermarkets have been forced to become more ethical not only with the products they are selling but with employees rights and how the company is acting as a whole. This is mainly due to the abundance of negative information that was given to the public on giant corporations in the early 2000’s. A surge in the demand for fair-trade tea or coffee and organic free-range meat forced supermarkets to re-think their current products. The following will look into supermarkets that have recently been in the news concerning CSR issues.

tesco.png
Sir Terry Leahy Tesco’s Chief executive released a ten-point plan ‘Tesco in the Community’ in June 2006, which covers a variety of CSR problems for which they were previously attacked in UK Parliament. The plan was released a month after the UK’s Office of Fair Trading decided to refer the grocery sector to the Competition Commissions over allegations the supermarkets operators are exercising too much power (Unknown, Ethical Performance 2006).

Tesco Ten Point Plan;
- Halve energy use by 2010
- Double customer recycling by 2008
- Ensure all carrier bags are degradable by the end of 2006 and carrier bag use cut by 25% over the next two years
- Introduce nutritional labelling on all 7000 Tesco own-brand products by 2007
- Launch a healthy eating and nutritional education programme for families in deprived areas
- Get 2 million people running, cycling or walking in events in the run up to the 2012 Olympics
- Reduce the frequency and noise of deliveries to Express stores
- Increase local community consultation before building new superstores
- Help small suppliers by holding open days across the UK
- Improve local sourcing by introducing regional counters into stores and improve labelling to highlight local produce.
(Baker, Mallen 2006)

Although this plan is undoubtedly moving the grocery sector in the right direction and will help the community, many observers had reservations around Tesco’s motives. Andrew Simms, a policy director at the New Economics Foundation said that Tesco’s plans were not far reaching enough and the company was using diluted CSR in a calculated way to maintain market power(Unknown, Ethical Performance 2006).

This type of criticism has been thrown at many corporations publishing these plans to become more socially responsible and that the only reason for these ideas is to gain and maintain market share and in turn make higher profits. However Tesco argued back that the 10-point plan would be beneficial for many stakeholders, it will create more jobs for communities and of course help the environment.

Tesco have also recently released a new wine sourced from the Enaleni community- a South African black empowerment programme in Western Cape. The firm is using social media to choose, design and name the new wine(Smith, Steve 2013). This project is designed to help provide a sustainable revenue stream to a farming community. Having social media simply create this product will undoubtedly create very positivepress for Tesco due to amount of information that will be available to a vast amount of people through Facebook and Twitter.

sainsburys.png

In 2011 Sainsbury’s unveiled a new CSR strategy called the 20x20. The plan was similar to that of other supermarkets actions, and included driving down the energy use in supermarkets, doubling the amount of British food sold from the current £4 billion a year, increasing sales of fairly traded products to £1 billion and making sure suppliers of meat, poultry, eggs and dairy goods follow higher welfare standards. Sainsbury’s is currently the world’s largest fair trade retailer and the largest retailer of MSCcertified fish and RSPCA Freedom Food certified products. Internally the company also plans to create 50,000 new jobs by 2020 (Smithers, Rebecca 2011).

Sainsbury’s received little criticism for their plans even though they were published 4 years after Tesco and Marks and Spencer had made theirs. David Cameron (Smithers, Rebecca 2011) welcomed the announcement saying Sainsbury’s scheme was a good example of the government Every Business Commits project, which is encouraging businesses to help build a ‘big society’.


morrisons.png


Morrison’s is the UK’s fourth largest supermarket and recently is becoming more popular due to its low prices and the increasing quality of its products. Steven Butts head of CSR at Morrison’s stated that the company is aware of how much customers are now caring about quality, service and value when choosing a supermarket, but that now they are now caring about responsible sourcing, nutrition, welfare, environmental and ethical issues.
In 2013/4 it released the following CSR overview of actions taken over the past year and the firms plans for the future.

csr morrisons.png
(Butts, Steven 2014)

Morrisons in 2008 was also the first UK or Irish company to sign up to a new ethical scheme. The scheme was set in place to empower workers in developing countries so they are able to talk freely about poor pay, working conditions and any other issues (Mcdonald, Henry 2008). This will allow Morrisons to find out the working conditions of their suppliers and also their own company. Dermot Kenny (Mcdonald, Henry 2008) one of the projects founders said the scheme was designed to highlight health and safety issues such as whether or not workers have access to clean drinking water and have the correct breaks whilst working.

However Morrisons received little press recognition for this initiative, mainly due to supermarkets like Waitrose leading the market in being ethical towards their staff and suppliers. Unfortunately stories concerning how supermarkets like Morrisons, Aldi and Lidl are driving farmers to bankruptcy discredit the industry as a whole. In one example concerning milk, these corporations were accused of paying farmers 25p for a litre of milk, 5p below the minimum price that producers can survive on. RABDF chief executive Nick Errington(Collinson, Patrick 2012) found that supermarkets used to make just 2.3p profit a litre but now it is as high as 26p, and this margin was something supermarkets just didn’t deserve. ‘The processor has to do all the pasteurisation, bottling and delivery to the supermarkets. All they do is put it on the shelves and collect the money.’



marks and spencer.png


Marks and Spencer released their CSR strategy as Plan A. The aim of Plan A was to make M&S more efficient, more rewarding and more engaged, and to change the typical pattern of the doing kind of this business (Kondraciuk, Joanna 2014). Currently this sustainability strategy has racked up £135 million worth of savings in 2014, which was a 29 per cent increase on the previous 12 months. 45% of their products now come under the Plan A programme, in that they are Fairtade, organic, carbon neutral, or made from recycled material. Marks and Spencer also recently revealed that they have decreased carbon emissions 23% since Plan A was originally produced in 2007. Waste levels are also down by 28% and water use has fallen by 27% in the same period (Nichols, Will 2013).

Additionally Plan A has been a very powerful brand change for the company. M&S have helped 75,000 employees and 2000 suppliers to see the links between activities as disparate as taking trans fats out of foods, reducing energy and promoting Fairtrade. Externally it has also helped them demonstrate to stakeholders, 10% of which are ‘green crusaders’ that the firm is absolutely committed to playing a leading role on sustainability (Barry, Mike; Calver, Lucy 2009).

EMR also discovered that Marks & Spencer is considered to be the most recognised brand for CSR, followed by the Co-operative and the BBC (Creighton, Jennifer 2014).

What differentiates M&S’ Plan A is the measurability and the fact they are rapidly achieving targets set in 2007. EMR have stated that Marks and Spencer is considered to be the most recognised brand for corporate social responsibility (Creighton, Jennifer 2014). Out of the 180 targets 139 strategies have been ticked off and another 31 are on target to be achieved by 2015. Only 4 are behind schedule, four have not been achieved and one plan has had to be cancelled concerning electrical products they have taken out of their product range (Barry, Mike; Calver, Lucy 2009).

How strong are the motives behind supermarkets CSR?

Milton Friedman was a Nobel Prize winning economist whose ideas over social responsibilities became very influential in America during the 1980’s and the 1990’s (Fisher, Colin; Lovell, Alan 2006). Friedman wrote an article concerning why the only social responsibility of business is to increase profits, and not to indulge in social interventions and ‘good deeds’ (Fisher, Colin; Alan Lovell 2006). He described any donations made by these corporations as commercial investment, that they are almost forced into following any bad press they may have received. He also argued that any money invested would come at an expense to shareholders or employees and this in itself was unethical. The company therefore had to make sure their CSR strategy would make them money.

More recently many critics have also commented on the motives behind corporations CSR strategies. An article on Corporate Watch found that in over 80% of corporations CSR decision-makers were very confident in the ability of good CSR practice to deliver branding and employee benefits (Unknown, Corporate Watch, no date). Similar to Friedman’s argument they believe that it was a cheap way of getting very good advertising. This is contrary to the claims of many pressure groups constantly harassing big corporations, who assert that companies involvement in communities help them develop a personal connection with their customers, and in turn create brand loyalty (Unknown, Corporate Watch, no date).

Conclusion


Overall corporate social responsibility is having a positive impact on society, despite the questionable motives of businesses. The increase in businesses becoming more socially responsible will help address other broader concerns on the environment, like pollution and responsible sourcing of produce. In addition, thanks to these initiatives employees, not only in the UK but also in many developing countries, now benefit from better pay and working conditions.

Jon Burchell (2008) discussed the expansion in both the number of companies undertaking CSR activities and the increase in the nature and extent of these activities, and suggested that maybe CSR is becoming a concept that may help reshape the values of the contemporary company. He suggested this extends to the subsequent behaviour and practice that such values engender (Burchell, Jon 2008).

However the question that will continue to be asked is whether CSR will actually mark a deep-rooted value change in company activity or whether the changes we are currently witnessing are nothing more than current PR (Burchell, Jon 2008).

References


Baker, M. (2006) The big supermarkets- now competiting on price, quality... and trust[Online] mallenbaker.net. Available from: http://www.mallenbaker.net/csr/page.php?Story_ID=1635 [Accessed February, 2015].
Barry, M. & Calver, L. (2009) Marks and Spencer describe its journey from corporate social responsibility to sustainability[Online] Marketing Magazine. Available from: http://www.marketingmagazine.co.uk/article/948198/marks---spencer-describes-its-journey-corporate-social-responsibility-sustainability [Accessed February, 2015].
Burchell, J. (2008) The corporate social responsibility reader. 1st ed. Oxon: Routledge.
Butler, S. (2014) Asda outperforms supermarket rivals with 5% profit boost last year[Online] The Guardian. Available from: http://www.theguardian.com/business/2014/oct/10/asda-supermarket-5-percent-profit [Accessed January, 2015].
Butts, S. (2014) Corporate Responsibilty Review[Online] Morrisons. Available from: http://www.morrisons-corporate.com/Global/corporate/MorrisonsCRReview2013-14_NEW.pdf [Accessed February, 2015].
Collinson, P. (2012) Dont buy milk from Morrisons, Aldi, Lidl or Londis, say dariy farmers[Online] The Guardian. Available from: http://www.theguardian.com/money/2012/jul/27/dairy-farmers-milk [Accessed February, 2015].
Crane, A. & Matten Dirk (2007) Business Ethics. 2nd ed. Oxford: Oxford University Press.
Creighton, J. (2014) Marketers judge companies on strength of CSR performance, claims report[Online] Marketing Magazine. Available from: http://www.marketingmagazine.co.uk/article/1307351/marketers-judge-companies-strength-csr-performance-claims-report [Accessed February, 2015].
Evan, W.M. & Freeman, R.E. (1993) Ethical theory and business. 3rd ed. Englewood Cliffs, NJ: Prentice Hall.
Fisher, C. & Lovell, A. (2006) Business Ethics and Values. 2nd ed. Essex: Pearson Education Limited.
Freeman, R.E. (1984) Strategic Management. A stakeholder approach. 1st ed. Pitman: Boston.
Holme, R. & Watts, P. (2000) Corporate Social Responsibility: Making good business sense[Online] WBCSD. Available from: http://research.dnv.com/csr/PW_Tools/PWD/1/00/L/1-00-L-2001-01-0/lib2001/WBCSD_Making_Good_Business_Sense.pdf [Accessed January, 2015].
Kondraciuk, J. (2014) The 2013 Marks and Spencer Plan A report[Online] CSR International. Available from: http://www.csrinternational.org/2013-marks-spencer-plan-a-report [Accessed February, 2015].
Mcdonald, H. (2008) Supermarket signs up to ethical audit[Online] The Guardian. Available from: http://www.theguardian.com/world/2008/sep/07/fairtrade.morrisons [Accessed February, 2015].
Nichols, W. (2013) M&S Plan A sustainability strategy savings reach £135m[Online] Business Green. Available from: http://www.businessgreen.com/bg/news/2273234/m-s-plan-a-sustainability-savings-reach-gbp135m [Accessed February, 2015].
Pettinger, T. (2014) The battle for market share in UK supermarkets[Online] Economics.Help. Available from: http://www.economicshelp.org/blog/11947/economics/market-share-in-uk-supermarkets/ [Accessed January, 2015].
Robinson, M. (2014) The slaying of the big supermarkets: How battle with budget chains sent share in Tesco, Sainsbury's and Morrisons into freefall in 2014 and sparked price war that will last well into 2015[Online] The Daily Mail. Available from: http://www.dailymail.co.uk/news/article-2874292/The-slaying-big-supermarkets-battle-budget-chains-sent-shares-Tesco-Sainsbury-s-Morrisons-freefall-2014-sparked-price-war-2015.html#ixzz3QbZAezQM [Accessed January, 2015].
Sexton, R. (2014) Organic Market Report[Online] Soil Association. Available from: http://www.soilassociation.org/marketreport [Accessed January, 2015].
Smith, S. (2013) Supermarkets and CSR[Online] Emerging Spaces. Available from: http://emergingspaces.co.uk/supermarkets-and-csr/ [Accessed February, 2015].
Smithers, R. (2011) Sainsbury's launches sustainability plan[Online] The Guardian. Available from: http://www.theguardian.com/environment/2011/oct/12/food-food-and-drink [Accessed February, 2015].
Stark, A. (1994) Whats the matter with business ethics. 1st ed. London: Harvard Business Review.
Unknown, B. (2006) Supermarkets in competition probe[Online] BBC News. Available from: http://news.bbc.co.uk/1/hi/business/4753707.stm [Accessed January, 2015].
Unknown, C.W. (no date) What's wrong with Corporate Social Responsibility? The arguments against CSR[Online] Corporate watch. Available from: http://www.corporatewatch.org/content/whats-wrong-corporate-social-responsibility-arguments-against-csr [Accessed February, 2015].
Unknown, E.P. (2006) Tesco counters critisim with ten point plan[Online] Ethical Performance. Available from: http://www.ethicalperformance.com/news/article/3984 [Accessed January, 2015].
Unknown, S. (no date) CSR and Ethics[Online] Smartbiz. Available from: http://www.smartbiz.nu/pages.asp?PageID=654&Base=1&MenuID=696 [Accessed January, 2015].


2, 014 Words Added to: CSR in the Supermarket Sector



Stakeholder Theory and the Classical View


There have been said to be two views to the way a business acts within the market place (Lantos, 2001). These are the ‘pure profit- making view’ and the ‘constrained profit- making view. These two views are part of the classical view and criticise the need for businesses to be socially responsible. Traditionally companies where purely motivated by profit, however, work from Friedman (1998), a famous economist contradicted this view. He supported the ‘constrained profit- making view’ believing that business should act ethically and as a result, the company will make profits for shareholders. This paved the way for CSR as he believed businesses should maximise the profits for stakeholders, whilst behaving ethically. However, it has been argued that social problems should be a problem for the state and not the business (Levitt, 1958; Friedman, 1998).
The stakeholder theory (Freeman, 1998) identifies all of the shareowners and therefore, goes against the traditional view as it states that a business must consider all parties that will be affected by their actions. Affecting these parties negatively then, will reduce profits. Therefore, in order to succeed a company must consider the need to be socially responsible. The shareowners described in the stakeholder theory are as follows:
  • Creditors
  • Employees
  • Customers
  • Suppliers
  • Communities

Freeman describes the shareholders as stakeholders. He describes this as “the logical equivalent of contrasting ‘apples’ with ‘fruit’.” (Freeman et al., 2004, p. 365). Meaning that it would be illogical to ignore the fact that acting unethical towards any of these individual stakeholders will affect a business. Therefore, he argues that it is beneficial to a business to act socially responsible. Problems associated with this stakeholder theory can be seen with ‘mute’ and ‘absent’ stakeholders (Capron, 2003: 13). These describe actions of a business affecting both the natural environment and the future generations. Capron, 2003 argues that it can be hard to identify whether a business will effect these groups as the natural environment will not respond. Changes to the natural environment may affect future generations. It can be hard to judge whether the actions of a business will affect future generations. Therefore, it is the responsibility of stakeholders to consider how operations may affect the natural environment. This research then, has identified the need for companies to act socially responsible as it will affect all of the stakeholders, therefore, having a negative effect on profits.

Stakeholder Influence Capacity


There has been some research to suggest that financial returns and acting socially responsible directly influence upon each other. Barnett (2007) built on the premise of the stakeholder theory and identified that stakeholder relationships would benefit from socially responsible behaviour, this is known as the Stakeholder Influence Capacity (SIC). Barnett (2007: 803) defined SIC as ‘the ability of a firm to identify, act on, and profit from opportunities to improve stakeholder relationships through CSR’. This theory conceptualises the idea that stakeholders hold a favourable view of firms with a reputable CIS history. Firms are able to improve their CIS history by acting socially responsible and being recognised for these acts. This increases the chance for investment and can have a positive financial impact for the organisation. The past actions of a firm behaving socially responsible have been described as an intangible asset, which Barnett (2007) refers to as the SIC stock, meaning that a firm acknowledging the need to consider CSR will have a positive effect on stakeholder attitudes. Organisation can procure highly valuable assets such as, good lasting brand reputation and loyalty.
This theory has described how businesses acting socially responsible within a marketplace can have a positive effect on profits. It can help avoid any Government imposition which may harm the brand of an organisation. The theory has highlighted that supermarkets would need to build their CIS stock in order to make themselves attractive to investors. It seems very important today, for organisations operating in the supermarket sector to consider CSR. The Co-operative group has based its entire business model on being ethical and socially responsible. “Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity.’ (The Co-operative, 2013). The Co-operatives supermarkets then could be considered as a leader in terms of the need to act socially responsible within the marketplace of the supermarket sector.


co-op logo.gif


The Co-operative says that social responsibility lies at the heart of the business. The sustainability report says how Co-op is “Contributing to international development through our work of fair and ethical trade; taking a responsible approach to the food, financial and other products we sell; and promoting a more equal and inclusive society” (The Co-operative, 2013). The Co-operative group has done a lot to give back to the community. Some highlights from the report are as follows:

  • £15.7m invested in UK communities
  • 50,000 people benefitted from sales of Fairbourne Springs bottled water
  • £5m donations raised since 2007
  • 1.5 million people befitted from Young Peoples Programme in 2013
  • £6m raised for Charity of the Year- Carers Trust
  • Sales of Fairtrade products increased to £140m, benefitting 225,000 people in 2013
  • 32% of food promotions are for healthier products
  • Insurance products continually ethically screened

(The Co-operative, 2013)

Carers Trust Logo.png










The Co-operative report is divided into three sections. The report looks at the ways in which Co-op is ensuring social responsibility. The second part describes what actions are taken to protect the environment and the third focusses on the value delivered to members of the Co-operative group. Throughout the report, then it is clear to see how central of an issue corporate social responsibility is.
The group continues to invest in the community and most importantly to investors deliver value to stakeholders. The Co-operative group boasts how it continually strives to source products sustainably and increase equal opportunities. The Co-operative group “has received two recognitions for its initiatives aimed at championing equal opportunities and diversity. It has been named the Business of the Year at the Lesbian and Gay Foundation’s Homo Hero Awards 2013 and it was re-accredited as Two Ticks employer, which recognises its commitment to recruiting and developing people with a disability.” (Co-operative News, 2014). The Co- operative group then, are leading the way as to more socially responsible supermarkets. An overview of the report can be seen in this video from Nick Folland, executive director of the company.




Another notable mention in the realm of supermarket CSR can been seen in the case of Asda. Asda is owned by US supermarket giant Walmart. Following the disastrous effect of Hurricane Katrina in 2005, Walmart has become ever more sustainable with its three point plan. “1) To be supplied 100% by renewable energy, 2) to create zero waste and 3) sell products that sustain people and the environment” (NFU, Undated). This plan has had an influential effect on the sustainable programme of Asda focusing on reducing the harmful effects of its supply chain.

Asda Logo.jpgAsda being part of the Walmart group has also developed its own sustainability plan. This plan is known as Asda’s sustainability 2.0 plan, and was created in 2010 and forecasted actions up until the year 2015. “The Sustainability 2.0 strategy is intended to continue the transformational plan to reduce our operational impacts but crucially accelerate progress reducing the impacts of our supply chain” (Asda, 2015). The plan is divided into sub- sectors which clearly outline goals and targets which will help Asda be a more socially responsible organisation. The plan is divided into five areas.

Corporate


Asda’s corporate objectives include, further reducing its carbon footprint year on year. The target is to decrease their carbon footprint by 10% each year, therefore reducing the impact the company has on the environment. Asda also plans to make their supply chain more resilient to adverse weather conditions. They aim to achieve this with their mitigation plan, which includes a project underway with PwC, a retail strategy company.

Products


Asda Plan to reduce their carbon, and water usage and be more sustainable with their supply chain. They plan to do this with their three main goals.
  • Support farmers & their communities
  • Produce more food with less waste & fewer resources
  • Sustainability source key agricultural products

(Asda, 2015)

Property and Energy


This includes reducing carbon emissions across stores, depots and offices by a total of 35%. To improve the carbon efficiency of the stores to further reduce impact on the environment. Asda have also planned to reduce refrigeration impacts, which includes reducing leakage by 8%. Asda also plan to reduce the amount of water used in stores by 30%.

Transport


“Between 2005 and 2010 Asda has reduced emissions from its fleet by 42% with an aim of 60% reduction by 2015” (NFU online, Undated).

Waste


Asda aims to reduce the amount of waste diverted to landfill by 100%, of which they had achieved 96% by 2011. Asda is also supporting the initiative from Walmart to reduce the usage of plastic bags. They aim to reduce plastic carrier bag usage by 33% by 2013, which they have achieved.

The Need for Supermarkets to consider CSR


A successful corporate social responsible strategy could change the ways a consumer perceives a company and have a positive overall effect on the brand image of an organisation. The careful attention paid to each strategy in both cases in the supermarket sector have demonstrated the need to actively engage in ways to reduce an organisations impact on the environment, a failure to do so may have a negative effect on the business. It seems that having a CSR strategy is almost an essential marketing tool for an organisation in the supermarket sector. A CSR strategy is a good way for a company to communicate ways in which it gives back to society. CSR in the supermarket sector can almost be seen as a form of PR work. All of the organisations in the supermarket sector try to make themselves appear socially responsible. A failure to realise the impact of a business on society can have a negative effect on the ways a consumer perceives an organisation.

It seems that all of the supermarkets actively put across the fact that they have a CSR strategy. This supports findings from Friedman (1998) as he believed businesses would take steps to reduce its impact on society. Businesses in the supermarket sector have not always behaved socially responsible. It can be said that organisations in the supermarket sector have moved away from the more traditional based market view which places a focus on making decisions based solely to maximise profits. In the early 2000s Tesco was hit by heavy criticism from national organisations, trade bodies, individuals, consumer groups and watchdogs, which lead to detrimental effects on the brand of this supermarket.

This criticism was focussed on the ways in which Tesco deals with its employees and suppliers in the supply chain. The criticism revealed that Tesco would often use aggressive tactics to force situations upon their suppliers. This criticism was so large that it caused Andrew Simms to write a book named ‘Tescopoly’ (2007) which heavily criticised the business for all its actions and condemned the organisation in the minds of many consumers. Andrew Simms coined the term “clone town” which described how the British high streets are becoming increasingly homogenised. This term described how Simms believed the ways of modern life continually alienate consumers and create this unsuitable lifestyle. Describing how the Western culture has become increasing ‘throwaway’. Simms work has highlighted the need for the average consumer to lead a more sustainable lifestyle. It is the changing perspectives of consumers which have sparked the need for businesses to pay more attention to the impact they have on society and the environment around them. The heavy criticisms of the actions of supermarkets have highlighted how essential it is for organisations operating within the supermarket sector to consider CSR to, a) improve the business in the minds of stakeholders and b) have a positive overall effect on the purchase intentions on consumers. A sound CSR strategy is essential to building a successful brand that is able to retain customers and pose and attractive investment opportunity to stakeholders.


References


Asda. (2015) ‘Sustainability Policy and Targets to 2015’. Asda Stores Limited. Available from: http://your.asda.com/system/dragonfly/production/2013/11/21/10_28_40_945_ASDA_SUSTAINABILITY_POLICY_GOALS.pdf
Barnett, M. (2007). ‘Stakeholder influence capacity and the variability of financial returns to corporate social responsibility’. Academy of Management Review 32(3): 794–816.
Capron, M. (2003). ‘Èconomie Éthique Privée: La responsabilité des entreprises à l’épreuve de l’humanisation de la mondialisation’, United Nations Educational, Scientific and Cultural Organization: Paris.
Freeman, R. (1998). ‘A stakeholder theory of the modern corporation’, In: Pincus, L. B. (Ed.), ‘Perspectives in business ethics’, McGraw-Hill: Singapore: 171-181.
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