Can you create a responsible cup of tea IBM Finance Conference Andrew Dakers December 2011 Overview Responsible business amp sustainability A cup of tea sustainability impacts and possible responses ID: 491397
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Slide1
Fair Tea Responsibility Deal:
Can you create a responsible cup of tea?
IBM Finance Conference
Andrew Dakers
December 2011Slide2
Overview
Responsible business & sustainability
A cup of tea – sustainability impacts and possible responses
Negotiating the Fair Tea Responsibility Deal
Feedback from the Office of Fair TradingSlide3
Sustainable development
“development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”Slide4
Regulators
Media
scrutiny
Role
of
government
Globalisation
Adherence
to
standards
Attract
&
retain best
staff
Product
info and
transparency
Return
oninvestment
Society’sexpectations
Consumer
awareness
Environmental
concerns
Corporategovernance
The pressures facing the tea businessSlide5
Responsible business today
Workplace
Governance
Environment
Community
Marketplace
EQUAL OPPORTUNITIES
REWARD AND RECOGNITION
HEALTH & SAFETY
WORK/LIFE BALANCE
RECRUITMENT AND RETENTION
TRAINING & DEVELOPMENT
HARASSMENT
/ BULLYING
COMPLAINTS PROCESS
CONSULTATION & INVOLVEMENT
GREAT PLACE TO WORK
DIRECTOR’S
RESPONSIBILITIES
CLEAR COMPANY DIRECTION
LEGISLATION
REGULATION
RISK MANAGEMENT
REPORTING
SOCIALLY RESPONSIBLE INVESTMENTVALUES/PRICES
CODE OF BUSINESS CONDUCT
OPENNESS
STAKEHOLDER INVOLVEMENT
ENVIRONMENT LEGISLATION COMPLIANCE
WASTE MANAGEMENTENERGY USE
WATER USE
RECYCLING
ENVIRONMENTAL FOOTPRINTTRANSPORT ISSUES
EMISSIONS
NEW BUILDING
COMMUNITY PARTNERSHIPS/SHARING
VOLUNTEERING
GOOD NEIGHBOUR PROGRAMMES
COMMUNITY CONSULTATION
GIFTS IN KIND
HEALTHY MARKET ENVIRONMENT E.G. EMPLOYMENT, CRIME
CONSUMER RIGHTS
FAIR PRICING
PRODUCT SAFETY
ACCESS FOR PEOPLE WITH DISABILITIES
SUPPLIER PRACTICES INCLUDING PAYMENTS/ TERMS/SUPPLIER INVOLVEMENT
EASY TO UNDERSTAND LABELS AND INFORMATION
SUSTAINABLE RAW MATERIALS
RESPECT OF PRIVACYSlide6
Overview
Responsible business & sustainability
A cup of tea – sustainability impacts and possible responses
Negotiating the Fair Tea Responsibility Deal
Feedback from the Office of Fair TradingSlide7
The
Nilgiri
Hills in
Chembakolli
, South India.
Slide8Slide9
IMPACT?Slide10Slide11
IMPACT?Slide12
IMPACT?Slide13
IMPACT?Slide14
IMPACT?Slide15
IMPACT?Slide16Slide17Slide18
Overview
Responsible business & sustainability
A cup of tea – sustainability impacts and possible responses
Negotiating the Fair Tea Responsibility Deal
Feedback from the Office of Fair TradingSlide19
The ‘triangle of change’ …
Source: Triangle of change, One Planet Mobility, WWF-UK, 2008, pg 33Slide20
RESPONSIBILITY DEAL - EXAMPLEMigrant Worker Code of Practice
Seeks business signatories’ agreement to:Take an ethical approach to recruitment – both in relation to potential employees and any impact on their country of origin
Support migrant worker travel and accommodation
Support migrant worker integration into the host community
Provide for the needs of those who speak little or no English Prevent and address racial discrimination and harassment in the workplace
Afford fair treatment in the workplaceSlide21
The stakeholder cast
The senior business
leaders.
The campaigners.
The shareholders.
The customer.
Finance Director – Just Change Tea
Finance Director – Best Earl Grey
Which?
The
facilitator.
The
employees.
Friends of the Earth
Human Rights Watch
Community Mark
Investors in People
UK Trade Union
Indian Trade Union
Shareholders & Investors Action GroupSlide22
Overview
Responsible business & sustainability
A cup of tea – sustainability impacts and possible responses
Negotiating the Fair Tea Responsibility Deal
Feedback from the Office of Fair TradingSlide23
Feedback from the Office of Fair Trading (OFT)
HIGH COST RESPONSIBILITY DEAL
LOW COST RESPONSIBILITY DEALSlide24
Low cost, low impact Responsibility Deal
You have created an uncontroversial Responsibility Deal. This will have minimal social and environmental benefit.Cost neutral or net profits increased through a range of fairly cautious social or environmental improvements.Waste-reduction strategies, for example, may gain the business brand advantage or cut costs.
Issues of investor, regulator (OFT) or customer approval do not arise as their will be no impact of price.
Stakeholders may share (non-price related) information/ knowledge.
Conclusion >>Slide25
High cost, high impact Responsibility Deal
Well done in agreeing such a radical Responsibility Deal! This could have real social and environmental impact in the tea marketplace.Unfortunately we (the OFT) may not be able to allow this agreement to proceed.This is due to the constraints of competition law. We are concerned you may be colluding and fixing tea prices at an unacceptably high level for consumers.
We have taken action before….Slide26
OFT objections against supermarkets and dairies regarding claims of price-fixing in 2002 and 2003
Office of Fair Trading (OFT) issued a statement (2007) of objections against supermarkets and dairies regarding claims of price-fixing in 2002 and 2003.Sainsbury’s, Asda, Safeway, Dairy Crest, Wiseman Dairies and The Cheese Company all admitted liability.
However, they also stated that their actions were motivated by trying to help British farmers. Slide27
At the time retailers and dairy firms were under pressure from farmers and politicians to give a better deal to their suppliers.
The Cooperatition Incubator believes there is a case for radical Responsibility Deals to be allowed on the basis of social and economic sustainability benefits that would be lost through a lack of cooperation between companies.Slide28
Conclusions
High cost, high impact Responsibility Deals throw up a variety of legal problems for companies with Competition law. Given this The Cooperatition Incubator is asking the Department for Business to:
Instruct OFT to publicly acknowledge that public policy goals are relevant in EU and UK competition
law;
Ensure OFT reforms introduce a small, specialist unit to balance competition and wider public policy
goals;
Create an online register/website
for present and future public interest driven voluntary agreements that enables:
Full transparency.
Application of best practice in developing
agreements.
Capture of insights and feedback from stakeholders supportive or against an agreement either when it is at the proposal stage and/or during its active life
.Slide29
Based on an ethical approach to economics radical Responsibility Deals could:
help accelerate the advance of responsible business practice;in the context of the financial crisis and collapse in trust in business, provide the basis for a much needed new ‘contract’ between business and society. Synthesising the best of competition and cooperation we have coined the term ‘
cooperatition
’ to describe the approach. Slide30
Fair Tea Responsibility Deal:
Can you create a responsible cup of tea?
IBM Finance Conference
Andrew Dakers
December 2011