Providing stability and better financial returns: Sodexo UK & Ireland talks to Footprint about why sustainability is an anchor for uncertain times. By Amy Fetzer
With Brexit, increasing rates and rising raw material costs knocking confidence, creating uncertainty and squeezing bottom lines, foodservice businesses are feeling the pressure. For example, more than two thirds have increased menu prices over the last quarter to keep pace with rising costs, according the CGA’s latest Business Confidence Survey.
But does this pressure mean that sustainability efforts in foodservice are also inevitably being squeezed? Not necessarily, according to Sean Haley, regional chair, Sodexo UK and Ireland. This is because sustainability is “just good business. It’s the right thing to do, and especially in challenging times. There is a lot of uncertainty around, but having sustainability embedded into the business puts us in a stable position.”
This stability comes from several angles. The first is that it strengthens relationships with clients and aids retention, “because we’re aligning with their issues.” The second is because embedding sustainability into the business builds resilience through engaging with suppliers and being proactive within the business over issues such as waste management, gender diversity, sustainable sourcing and animal welfare – issues which are of increasing importance to both clients and consumers.
For example, the BHAs Foodservice Market Report 2017 noted that “consumers and employees in all industries increasingly want to engage with responsible firms”. The report identified responsible business issues such as healthier living, local sourcing, sustainable fishing, animal welfare, supply chain collaboration and ethical/fair trade as top priorities. Ethical living has also been identified by Euromonitor as one of eight consumer mega-trends shaping the economy between now and 2030.
Thirdly, aligning corporate policy with the UN’s Sustainable Development Goals, which Sodexo has also done, provides strength because the SDGs are a roadmap which set out a framework for tackling the challenges and risks facing society and the planet.
Haley is speaking to Footprint at its second Quality of Life Conference. This brings the business together for two days to discuss how to make people happier (or to “continue to move the needle toward more inclusive growth and a stronger social fabric,” to quote their corporate speak).
Sodexo has also just launched its revamped Better Tomorrow 2025 plan. This sets the business three overarching priorities of tackling hunger and malnutrition, promoting gender balance and preventing waste. This is broken down into nine categories with measurable commitments including having 100% of employees trained on sustainable practices and 100m beneficiaries impacted by Stop Hunger’s activities by 2025.
The argument is that if a business already has sustainability part of the everyday culture it means that despite pressures, “we don’t have difficult decisions on how to invest or what to prioritize,” says Haley. “Sustainability is ingrained in the business so it’s not a binary decision or a cost.”
Haley gives the example of Sodexo’s approach to gender balancing with Sodexo UK and Ireland achieving an impressive 47% of women in management positions. Sodexo’s own research has found that gender balanced management groups (with 40-60% women) perform better in the workplace than management groups without this balance. Research by McKinsey backs this up, finding that companies with better gender diversity are 15% more likely to have financial returns above their national industry medians.
Focusing on talent is smart as it is a persistent industry problem. For a contract caterer, this often extends beyond the issues of recruiting and retaining foodservice staff to include the workforce of their clients. “Wherever you go, the biggest problem is talent and the engagement of that talent,” says Haley. “Our clients realise our services have a big impact on their staff and customers, from soldiers to public sector staff, students to patients and health care professionals and so on.”
So far, so good, but how can clients and consumers be persuaded sustainability is not just a veneer, or a glossy corporate approach to presenting in the marketplace? Haley agrees that this is a challenge, but that the long-term relationships built on these values tell another story. And that those working in or with a company that is strongly committed soon realise when these commitments run “deep and that there is a conviction that comes across in our people which demonstrate it and help to maintain our values [into the future].”
“Listening to clients and understanding what their challenges are going forward keeps the whole thing quite fresh,” observes Haley. “Whenever we’re pitching for work, or retaining our current work, our sustainability activity is always a very prominent part of our development plans for our clients. It has to be constant, it has to continue throughout and it has to be embedded in our business planning.” And whilst at times it might be hard to justify the extra spend on something like higher welfare meat, at the end of the day, “it all starts with demand, because no matter how cost driven our clients and customers are, they are wedded to good business, community, and the wellbeing our customers and employees.”
This commitment will become an increasing necessity as forces such as the Paris Accord and the UNs Sustainable Development Goals continue to drive policy and strategy shifts across the economy as business and governments start to recalibrate to follow the blueprint they set out for a sustainable future for our resource-constrained and climate-fragile world.
A recent EY report identified a host of new megatrends which are transforming everything from the way we do business to consumer expectations. These include: climate change; empowered consumers and the necessity for innovation to make the planet resource rich instead of resource scarce. There is no magic bullet, but those businesses that hold fast to the principles of responsible business are certainly going to be stronger for an undoubtedly stormy future.