Launched in 2007, Marks & Spencer’s (M&S) Plan A seemed like yet another one of those initiatives that are designed to generate more news and positive good feel, than actual impact on the ground. Yet with the passage of years, Plan A has turned M&S into one of the foremost green enterprise in the UK and saved the firm millions of GBP through various initiatives. And yes, the positive coverage and news has only been too welcome.
Yet, Plan A is just the beginning. M&S intends to use the programme to turn itself into the world’s most sustainable major retailer by 2015. Shashwat DC got into a conversation with the Head of Sustainable Business,Mike Barry, who earlier was the CSO at the firm, to get to know more about the programme from the architect himself. He is currently the Director of Plan A, and working full-time at cutting the impacts on the environment. In a detailed chat, he shares his journey, vision and his thoughts on how companies in India can benefit from going green. Here is the Plan A Man in person.
You have spoken about the world moving from a CSR-centric approach to a move immersive corporate responsibility approach, wherein the business and sustainability are interlinked. What are the factors that are propelling the shift for sustainability, and what would you term as milestones in that journey?
Building a truly sustainable business model is a long, long journey. Like many companies in the past we focused on CSR, a risk driven approach that largely responded to the challenge of NGO and media campaigning and questioning. We were good at CSR and in 2006 in the UK we were named as Business in the Community’s most responsible company but even with that award we knew we needed to move on.
In 2007, we launched a bold sustainability programme, Plan A (because there is no Plan B for the one planet we have), an initial 100 (eventually 180) social and environmental commitments that set us on the journey towards becoming a sustainable business. It was prompted by concerns about resources (not enough wood, fish, water, energy etc on the planet) and social issues (poverty, well being, employment, labour conditions, transparency etc), which could no longer be managed ‘defensively’, but demanded proactive and systemic change to our supply chain, operations and the use/disposal by our customer of the 2.9 billion items per annum they bought off us.
The key milestones have been the completion of most of these commitments; the development of a powerful £135m pa net business benefit; and winning many awards (most responsible retailer in the world, BiTC Company of the Year again in 2012, Queens Award for Sustainability). However, we are clear that these milestones are just the start of the journey not the end! The next milestone is to update Plan A keeping us moving forward, becoming more sustainable and delivering more business benefit.
Big companies are perceived to be languid or at best cosmetic when it comes to their concerns on matters of environment and sustainability. Do you think that perception is valid, and what needs be done to change that?
I think that was a fair challenge five years ago. However, many large businesses are now taking sustainability very seriously. Companies like Nike, Unilever and Coca Cola see the same resource and social challenges as we do and have struck out on a proactive journey to become more sustainable not because they are being told to but because they recognise it’s vital for their future business success.
When you launched Plan A in 2007, there were 100 issues listed in it. Today, they have grown to 180, with £135 Mn net benefits from the programme. What reasons do you attribute to the success of the plan; top-management buy-in, intricate planning, etc?
There are lots of things that underpin the success to date of Plan A. Strong commitment from our CEOs, Sir Stuart Rose and now Marc Bolland, have been vital. Just as important has been the strong project management control that my colleague Adam Elman put in place. This has ensured we have the management control over many Plan A projects that run in the business touching literally thousands of stores, lorries, factories, farms and fields. It’s underpinned the strong business case we’ve developed enabling us to measure the costs and benefits of the actions we’ve taken. The third important thing we’ve done is to try and engage our customers and employees in Plan A, rather than just leaving it to the ‘experts’.
One of the points you have often underscored is the need to listen to the stake-holders. But considering that any given firm has so many of them, speaking from so many view-points, how do you assimilate then in a strategy?
Stakeholder engagement has been absolutely crucial for Plan A. It’s helped us work out what matters and identify partners that can help us deliver change. You cannot meet everyone, but you can try and listen to as many different voices as possible. Crucially we’ve sought to get as many colleagues as possible involved in stakeholder engagement. It’s not just me trying to meet every stakeholder! The fish team meet marine NGOs. The clothing supply chain team work with social NGOs etc.
Engaging the customer in the sustainability drive has been one of the biggest successes of Plan A. In fact, M&S has never shied away from sharing with the customers even when it has failed to deliver on the targets. How much importance do you give transparency, considering that even today there are very many firms that feel shy of sharing their sustainability performance, for the fear of competitive advantage?
Transparency has always been important. Right from the start of Plan A we said we’d set clear, transparent targets and report honestly against our performance. The transparency debate has accelerated further in the last couple of years, in part because of the rise of social media, in part because of a number of significant issues (Horsemeat and Rana Plaza factory collapse in Bangladesh) that have renewed media and consumer interest. Into the future, we believe transparency is only going to get more important and will shift from a focus on annual reporting to the much more regular availability of performance data and policy positions.
There has also been a lot of innovative ways that you have connected with the shoppers, like the Shopping initiative. How important and challenging is to engage the customers?
We have 21 million customers in our stores every week in the UK and Ireland and several million more globally. We can only become truly sustainable if we can engage those customers in more sustainable approaches to consumption. Crucially though before we ask our customers to change we must show them that we have put our own house in order and we are doing all we can to improve our performance too. I think we’re getting to that stage where they trust we are doing plenty and as we’ve seen with the positive response to shopping they are happy to get involved with projects that they believe are relevant, easy and positive.
It is often said that the customer is not yet ready to pay a premium for greener products: how valid is that assessment according to you?
This is a crucial point. I don’t believe there is a ‘green premium’ in the market. Why should a customer pay more for a product that HASN’T exploited people and planet? It should be a given! So don’t lazily assume there will be a green premium, there won’t be, this is business as usual. If you have to pay more for better cotton, you’ll have to find internal ways of paying for it, for example by using money saved from using less energy, where there will always be a potential premium is on innovation. Deliver the customer an aspirational, novel, beautiful product that is also better for planet and people and you can consider charging a premium.
Cradle-to-cradle or Closed-Circuit approach is a hot topic these days, but considering the vast network of M&S, especially the supply-chain, how do you ensure that the vendors are equally aligned and excited about sustainability as you are?
We know suppliers are crucial to Plan A. We cannot become sustainable without them. We’ve created a Supplier Exchange to help them share challenges and solutions. We’ve integrated sustainability into many of our supplier standards. We’ve encouraged them to build pilot green factories in which they can learn much about how to run their businesses in the future. And in 2013 we hosted one of the UK’s biggest sustainability conferences at Wembley Stadium for 1000 of our suppliers with Al Gore as the key note speaker.
You have also spoken about partnerships, but while it is easier for a company to collaborate with NGOs (there is give and take), it is infinitely harder to collaborate among corporates. For instance, Google will never share the secrets of better managing its datacentre with Facebook. So, how does that get managed?
The more we’ve worked on Plan A, the more we’ve realized that we cannot become sustainable alone. We need the whole market to buy-in to shifting global commodity markets or helping the majority of consumers to participate in sustainable consumption. Yes, there are a few companies with whom it is very difficult to collaborate, but even with pure competitors there is more and more we need to do together. In other areas, whether via the World Economic Forum, Consumer Goods Forum or World Environment Centre there is so much that is being done collaboratively between businesses.
Should the drive for sustainability emanate from the top for it to be successful and pervasive, like for instance, you have spoken about how the CEO Sir Stuart gave challenging goals at the start of Plan A.? Or how the current CEO Marc Bolland too has set an ambitious target for M&S at the onset of the next plan?
Leadership from the top certainly helps. Sir Stuart and Marc have been great advocates and stimuli for change in a busy business dealing with a challenging marketplace in the short term. Not every business has such leadership from the top. I would remind anyone doing my role that before Sir Stuart we had limited support. Thus much of the preparatory work that was done that meant Plan A could be developed and launched in three months was done at a grassroots level in the business by good people with a limited mandate but who cared passionately about our future.
M&S is one of the few organisations that have linked sustainability targets and management compensation, how has that worked? And do you think it will be the norm in the regular days?
Aligning Plan A delivery with management compensation has been an important way of driving our sustainability agenda forward. Directors have part of their bonus potential based on delivering Plan A objectives relevant to their business area. For example, the Directors of Foods and General Merchandise have targets to grow the number of products they sell each year with a Plan A attribute towards our 2020 target of 100% of products having one. However, we did not rush into setting these objectives. First we created a robust governance and management information system to allow us to track performance on a regular basis. This has been crucial to making the bonus system work credibly.
Typically, sustainability assessment is a year-long cycle, namely, corporates evaluate the shift based on a timely assessment. Is there a need to make it more dynamic like, say the sales or business is? Can we move on to a stage where, sustainability can be monitored across the value-chain in a real-time basis? And more importantly, is there a need for it?
As I noted above on management remuneration we’ve developed a system that gives us regular albeit not real time data on our sustainability performance. This has given the business the management information to spot early and respond to emerging risks and opportunities. We are able to track quarterly the percentage of our products with a Plan A attribute and monthly we’re able to rank all our 500+ mainline stores in the UK on their Plan A performance. Whilst I don’t believe we need data daily, I would certainly recommend that any business with the ambition to be a leader on sustainability develop this level of MI and Governance, it’s been indispensible for us.
Have read some of your tweets on India, what do you feel is the challenge before Indian corporates in terms of sustainability and how should they be tackling it? Also, like we did in mobile technology, do you think India has a potential to leapfrog and become a sustainable economy that can teach things to the world?
India is a phenomenal country. A kaleidoscope of cultures and languages and as it’s shown in IT, it can be an incredibly entrepreneurial country too. It’s really exciting for Marks & Spencer to be part of its growth story. Growth has helped India address some of its greatest development challenges, but there still remains major poverty challenges and economic growth is helping contribute to the wider social and resource challenges I highlighted earlier. If we cannot (globally) find a better way to grow we will all ultimately suffer. I do think India has the potential though, to be bold as its economy develops to demonstrate this better growth where economic, social and environmental needs are respected and delivered together.
In the boardroom, the chief sustainability officer is still considered not all that important. Do you think that is changing? I mean, will the CSO be as ‘fashionably and publicly important’ as say the CIO?
It’s important that business takes sustainability seriously at the top of the business. Sustainable growth needs to be built into the very heart of a business model. Does this mean that every business needs a CSO? Probably not. Leading companies may take this route but what really matters is that the business is engaging all of its leaders in running their business areas sustainably. A good CSO is a coach/mentor supporting his/her colleagues in understanding sustainability and helping them spot the opportunities for running their business areas more successfully–more trusted, efficient, motivated and in-touch spotting new market opportunities before others.
Finally, you have now taken over as the director of Plan A, what is in the plans for Plan A? Are you a bit daunted by the level of expectations on you this time round, namely a bigger ‘Plan A’?
I’m really excited about becoming Director of Plan A. In part because I have a passion for Marks & Spencer, in part because of the potential to inspire many other companies to start the sustainability journey as they learn from us. The key word for me going forward is engagement. Engagement of our customers, employees, suppliers etc; showing them that sustainable growth is not a pipedream but a reality and leads to better outcomes for everyone on a personal, business, societal and ecosystem scale. Technology will be very important to the sustainable business journey but not as important as ‘hearts and minds’, people wanting to consume and run businesses differently because they see the value (Individually and collectively) of doing so.