Ethical Companies, M&S and Plan A

July 9, 2008

Despite its recent problems, M&S retains a reputation as a ‘green’ company. We evaluate this ahead of today’s general meeting

Leaders we deserve subscribers will remember its brilliant leadership statement of commitment to a green agenda: ‘There is no plan B’.

Katie Stafford, Sustainable Development Manager at Marks & Spencer outlined it to The Oxford-Achilles Working Group on Corporate Social Responsibility last year [11th May 2007].

Marks & Spencer has announced ‘Plan A’, a business-wide £200m ‘eco-plan’ which will have an impact on every part of M&S’ operations over the next five years. The 100-point plan means that by 2012 M&S will:

• become carbon neutral;
• send no waste to landfill;
• extend sustainable sourcing
• set new standards in ethical trading; and
• help customers and employees live a healthier lifestyle

The green agenda at M&S

Stuart Rose arrived as a major reinforcement in the company’s battle to fight off Philip Green’s bid. But the company was already being credited with (and profiting from) a green profile.

Marks & Spencer’s new chief executive took time out from fighting off takeover bids and accusations of insider share-dealing to pick up Business in the Community’s Company of the Year award from the Prince of Wales in London last night. The awards were judged by more than 100 assessors over 12 months and M&S impressed them with its integration of a set of values into its business practices.

It is not the retailer’s first such recognition. The company has been ranked No 1 by Greenpeace on its use of non-genetically-modified foods, ranked as the top food retailer by Friends of the Earth on pesticide reduction, and No 1 by the Marine Conservation Society on fish sourcing and by Accountability/Insight Investment on labour standards. These ratings have contributed to M&S being named as the Dow Jones Sustainability Index’s most sustainable retailer in the world for the past two years.

Mark Goyder, director of Tomorrow’s Company, said: “Corporate responsibility is one essential building block of enduring shareholder value. I hope M&S’s outstanding record as a responsible company will be properly valued as part of the overall decision shareholders now have to make about its future.”

Rowland Hill, M&S’s corporate social responsibility executive, said the current management was fully committed to corporate responsibility. He said: “We’re very comfortable with Stuart Rose’s approach to corporate responsibility. We’ve had a chance to re-assess where we are and this has resulted in the re-endorsement of many budgets. Philip Green’s record with other retailers would make us, in the CSR department, less confident about the future should his attempted bid succeed.”

Our financialization commentator suggested that longer-term this will sustain the company, telling Leaders we deserve

In the current bear market and the economic environment I do not think that the City expects spectacular shareholder value from the retailers. So, the initiatives with clear story lines that respond to the current trends- 100-point 5-year plan with £200 million spending to become a green leader in retailing- can go well with the stock market because they are full of purpose and intent. In a financialized economy the job of CEOs also involves creating convincing corporate narratives for the stock market to support the share price.