Ten years ago, UK retailer Marks & Spencer launched “Plan A” – a massive effort to completely restructure its operations and become the world’s most sustainable retailer. It’s close to succeeding, if it hasn’t already, but one man can’t stop a tidal wave, and the hard part is getting others on board.
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The next morning, Rose checked his email.
“That’s scary,” read one.
“This is amazing,” read another.
“We ought to be able to do something,” read a third.
“I actually had about 75 emails,” Rose recalled in the Guardian six years later. “For me, that was the green light saying, ‘These guys want to do something.’”
So, in January of 2007, Rose launched “Plan A”, which is a massive effort to completely change the way the company buys, produces, and packages each of the 30,000 products it sells.
Five years after that, the company was recycling enough to stop sending waste to landfills, and by year six, it was certified carbon-neutral. Today, as it celebrates ten years of Plan A, Marks & Spencer is one of the world’s most sustainable retailers, according to Toronto-based Corporate Knights, which ranks it as the 32nd most sustainable company out of 4,000 audited. Only one retailer, Finland’s Kesko OYJ, placed higher.
But it’s those other 4000 companies that keep Mike Barry up at night.
The Exception that Proves the Rule
Barry is the company’s director of sustainability, and he says M&S has a long way to go before he considers it truly sustainable, in the sense that its net impact on the environment and society is neutral at worst and hopefully positive.
“Metaphorically, we are but 25% sustainable,” he says. “At least 75% of the journey lies ahead.”
And that’s just for M&S, a premium brand whose $23 billion in revenue amounts to a rounding error in the $100 trillion global economy.
“Tiny little M&S is not going to make the world’s palm oil production sustainable on its own,” says Barry. “It needs to work with Unilever, with Coke, with Pepsi, with Walmart and all the others to make sure we can move the industry together.”
And that, it turns out, is exactly what it’s doing – and has been for a while.
Data compiled by the Forest Trends Supply Change initiative shows that companies achieve better results when they work together – at least when it comes to slowing deforestation.
The group identified 718 companies that had exposure to the “big four” commodities responsible for most of the world’s deforestation – namely cattle, soy, palm, and pulp & paper. As of March, only 447 of those 718 had made concrete commitments to reduce their impact on forests – meaning that 271 companies with combined revenues of more than $1.6 trillion had made no commitments whatsoever.
On top of that, the companies that made commitments reported progress on just 51 percent of them, while 20 percent of the promises had “gone dormant”, meaning their deadlines passed with no progress reported.
On the flip side, Supply Change also found that membership in multilateral sustainability groups like the Consumer Goods Forum (where M&S plays a leadership role) matters. Specifically, they found, more than 95% of companies in groups like the CGF, the Tropical Forest Alliance 2020, and Tropical Forest Trust have at least made solid commitments.
Keeping those commitments, however, is no easy matter – and M&S’s ten-year learning curve could help companies embarking on the journey.
Plan A: The Genesis
Rose became CEO in 2004, when he was brought in to fight off a hostile takeover. Once there, however, he began beating the sustainability drum.
“Stuart recognized that what we were doing at that time – what we now call ‘CSR’, or ‘corporate social responsibility’ – was good risk management: stopping bad things from happening,” says Barry. “But in 2006, he challenged us to come up with a plan for reinventing retailing for the 21st Century, and from that prompt – and a degree of Anglo-Saxon invective that you always got from Stuart to keep you moving forward at the right pace – he gave us three months to redefine CSR. From that came Plan A.”
In those three months, the company convened dozens of working groups to assess its resources, clarify its goals, and anticipate challenges. They quickly realized that, due to changes implemented decades earlier, the company already had an advantage over other retailers.
“Ninety-eight percent of what we sell in our stores is our own private-label product,” says Barry. “[That means] we’ve got a good understanding of our supply chains – the factories, the farms, the raw material sources that produce our goods – so we could put in place pretty good standards to make sure bad things didn’t happen.”
In the first phase, headed by Richard Gillies, Plan A aimed to reduce the company’s footprint – “to make M&S less bad,” as Barry puts it.
They looked first at what they could fix themselves.
“What Marks & Spencer owns are lorries, offices, and stores,” says Barry. “But the true impact of any retailer is downstream and upstream: think of all those thousands of factories, tens of thousands of farms, raw materials sources, the cotton fields, the palm oil, etc.”
The quickest way to ensure sustainable supplies was to work with established standards like Fairtrade and the Forest Stewardship Council (FSC), as well as newcomers like the Leather Working Group, but these only covered a small portion of the company’s products. So Rose began meeting with suppliers bilaterally to see what they could and couldn’t deliver – and says most of them were willing to give it a shot.
The Five Pillars
After three months, the working groups came up with 100 specific goals to be achieved between 2007 and 2012, all built on five sustainability “pillars”: climate change, waste management, natural resources, fair partnerships, and health & wellbeing.
As they raced towards implementation, the company’s head of internal communications, Robert Nuttall, realized the company needed to find a simple way of communicating this complex overhaul to 83,000 employees, 2,200 suppliers, and 30 million customers.
“Literally two nights before we launched it, he looked across at me and said, ‘Mike, you’ve got this hundred-point M&S sustainability plan, and that’s great. Well done. Greenpeace will love it. But it will mean nothing to 32 million customers or 83,000 colleagues. Give me a little bit of money. I’ll go away and help you invent a brand,’” Barry recalls. “He came back with, ‘Plan A, Because There is no Plan B.’”
Making it Pay
Critically, Rose argued that sustainability should become a pillar of their business plan – one that would spark customer loyalty and improve the company’s operations by making them more efficient (by, say, reducing energy costs) and more resilient (by making sure it had reliable supplies that wouldn’t evaporate with climatic extremes or social unrest).
“We’re very clear that, over the next 5-10 years, there will be real disruption in the marketplace,” says Barry today. “M&S wants to be well-positioned and ready for that disruption.”
But the plan didn’t come cheap: it would cost £200 million to implement, with money going into partnerships with small farmers and energy-efficiency investments, and financial payoffs would take years to materialize. Like Paul Polman at Unilever, Rose had to stare down investors and his own board of directors, and he did so relentlessly.
“Plan A was part of the drumbeat, and every week I would raise the subject,” he wrote. “The fact that I was the person chairing it meant that the senior managers at M&S had to come.”
By the end of 2008, the company had ratcheted up the its reliance on green energy and slashed its overall electricity usage 25 percent per square foot of floor space – a drive that helped Plan A swing into the black by the end of 2009.
But the global economy had slid into a ditch, and customers weren’t buying green in numbers that Rose had hoped. He realized they needed to ramp up their consumer engagement if the plan was to pay off.
Next Installment: A New Name, But the Same Direction Under a New CEO.
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