Making the Business Case for Sustainability Guide for Practitioners

MAKING THE
BUSINESS CASE
FOR SUSTAINABILITY
A G U I D E F O R
PRACTITIONERS

M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S i
INTRODUCTION AND
ACKNOWLEDGEMENTS
This document was created by retailers for retailers to assist in defining, communicating, and engaging senior
executives in making the business case for sustainability. The targeted outcome of this guide and associated
training session is to secure the support needed to broaden and accelerate sustainability initiatives in
the food retail industry.
Why is this guide needed? Sustainability is a
strategic imperative across all sectors for business
today. FMI members recognize that their industry is
uniquely positioned to make a difference by providing
consumers with more sustainable choices, producing
food as efficiently as possible, and reducing their
direct environmental and social impacts throughout
the supply chain.
However, because sustainability is complex, many
companies have a hard time moving beyond quick
wins, such as reducing energy use. In a recent FMI
survey of its members (Section 3), most report good
progress “within their 4 walls”: 90% report having
made significant progress pursuing quick wins; over
50% have addressed the broader impacts of their
operations (e.g., waste) and include sustainability
as a consideration in store design. They are having
greater difficulty gaining traction for more challenging
initiatives, where the rewards have a longer
timeframe. As examples, only 35% of members are
reporting progress in making their supply chain more
sustainable and only 6% currently educate consumers
about what they can do to be more sustainable.
“The FMI Sustainability Executive Committee
is continuously working to help move the
industry forward on sustainability. We provide
education and opportunities for pre-competitive
collaboration to help address ever-changing
sustainability challenges.”
Patti Olenick, Sustainability Manager, Weis Markets
Former Chair, Sustainability Executive Committee
In a 2010 survey by the United Nations Global
Compact of 766 CEOs worldwide, 93 percent
of CEOs said sustainability issues will be a critical
factor to the future success of their business.
“…never before have we seen the
marketplace and today’s consumers have
such a deep interest in and knowledge about
what companies stand for and how they are living
up to their promises.”
Howard Schultz, CEO
Starbucks Global Responsibility Report 2012
More than 50 large companies believe the
risk-based business case for sustainable
behavior change will be replaced by innovation
and market share drivers within five years.
Survey Report, Sustainable Lifestyles Frontier Group
BSR/Futerra Sustainability Communications
September, 2013

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Given the disconnect between aspirations and results
to date, there is an opportunity for food retailers
to elevate the importance of sustainability in their
companies, embed sustainability more deeply into
business processes and day-to-day decisions, and
find ways to make better use of limited resources.
While this deeper implementation of sustainability
is more challenging, it can also provide greater
benefits, not just on direct financial returns but brand
enhancement, employee recruitment and retention,
and a more secure supply chain.
There are numerous studies, resources and tools
that are available for free to help businesses develop
the business case for a given sustainability initiative,
but they often go untapped. This guide provides
sustainability leaders in food retail with a practical
approach; links to key resources; and specific
company examples to make the business case for
sustainability, where the results are clear as well as
where results may be long-term and less tangible.
For these reasons, FMI has partnered with Blu Skye
to capture the experience of industry leaders, as
well as Blu Skye’s expertise to develop this resource
customized to food retail. FMI would also like to
thank Kats Maroney for her hlep and expertise in
the development of this guide. While the examples
highlighted in this document focus on the food retail
industry, many of the lessons are applicable to any
sector.
This guide is comprised of this summary document
and additional sections that provide details on:
• company examples of sustainability in action
(Section 1);
• sustainability mega-trends that can be customized
to help substantiate the business case (Section 2);
and,
• results of FMI’s member survey (Section 3);
In addition to company examples, contacts are
listed should you be interested in more detail or have
questions.
“Retailers have already discovered the
revenue benefits and expense reductions
that are possible through the implementation of
recycling and other waste diversion programs.
Plus, the environmental benefits are huge. Using
a sustainability lens to evaluate processes and
projects will help companies unlock more growth
opportunities.”
Susan Ghertner, Director of Environmental Affairs, H-E-B
Vice Chair, Sustainability Executive Committee
The FMI Sustainability Executive Committee
(SEC) works to identify and prioritize
issues for action, develops tools and resources
on sustainability for the industry, and makes
recommendations to FMI’s Board and the
industry on policy and program development. This
group oversees a number of working groups on:
sustainable seafood, packaging, and food waste.
“True sustainability is complex because
it needs to be interwoven throughout a
company and its culture as well as considered in
every decision.”
Jeanne von Zastrow, Senior Director Sustainability
Industry Relations, FMI
Blu Skye is a management consultancy
that works with current and aspiring
sustainability leaders to transform business for
the 21st century and beyond. It helps companies
and industries develop and execute strategies
that create measureable value for shareholders,
stakeholders, and the world.

M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S i i i
CONTENTS
Executive Summary.......................................................................................................................1
Step 1: Lay the Groundwork..........................................................................................................4
Step 2: Develop the Content..........................................................................................................6
Step 3: Build Support and Buy-In.................................................................................................10
ADDITONAL SECTIONS
Section 1: Company Examples of Sustainability in Action ............................................................12
Section 2: Sustainability Mega-Trends..........................................................................................21
Section 3: Results of FMI Member Survey ...................................................................................26

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EXECUTIVE SUMMARY
SCOPE AND DEFINITION OF “MAKING THE BUSINESS CASE”
The corporate sustainability leader is focused on four
main activities:
1. Identifying the emerging issues and opportunities
material to the business,
2. Formulating a strategy to address these issues and
opportunities,
3. Defining the business case,
4. Engaging a team to take action, and
5. Leading action and implementing change.
The first two activities are covered in the previously
published FMI Sustainability Starter Kit, while the
last three are the focus of this guide.
The first step is to define the business case for
sustainability. A business case in traditional terms is
well known: what is the financial impact of a given
strategy or initiative? However, with the relatively new
lens of sustainability applied to business, the business
case is not just about increasing profit but increasing
profit while conserving the planet and enhancing
communities.
In the U.S. alone this past year, we saved
customers more than $1 billion on fresh
fruits and vegetables through sustainable
agriculture practices and sourcing improvements.
Walmart 2012 Annual Report
“Making the business case for sustainability
requires a company to examine its entire
operation. From supply chain to customer
satisfaction, it requires a dedicated team of
people with a passion for change and patient
persistence.”
Suzanne Lindsay-Walker, Director of Corporate
Sustainability, The Kroger Company
Chair, Sustainability Executive Committee
Marks Spencer is realizing £185 million
in net benefits from Plan A over the last
5 years, which will be reinvested back into the
business.

Many companies are discovering the significant
financial benefits of integrating efficiency measures
and waste reduction strategies. However, to be a truly
sustainable company, larger and more transformative
approaches are needed. Many companies have
integrated sustainability into major strategies that cut
across the company, such as Ahold’s “Responsible
Retailing”, Campbell’s “Nourishing Our Neighbors,
Our Community, Our Employees and Our Planet”,
and Unilever’s Sustainable Living Plan. Effectively
implementing this type of change is complex, will not
happen overnight, and therefore requires patience
and collaboration both within the company and
potentially across the value chain. Focusing on the
business case is the right place to start. To do this, it
is important to have compelling facts to support your
analysis as well as a plan for communications and
execution.
This guide will focus on both the content as well as
how to use this information effectively to make the
case for sustainability in your organization. Based on
our collective experience, there are three key steps to
making the case:
Step 1. Lay the Groundwork
Step 2. Develop the Content
Step 3. Build Support and Buy-In
Each of these steps is important and mutually
reinforcing.
“Our current economic model assumes
the planet’s resources are infinite and that
limitless growth is a good thing. We’ve been
drawing down our natural capital instead of living
off its interest. Any financial planner knows that
is unsustainable.”
Bob Willard, 2013,
Industry Consultant on Sustainability
Unlocking growth through sustainability is
an exceptional opportunity for retail and CPG
companies to create shareholder value.
FMI/McKinsey Survey, July 2013

STEPS FOR MAKING THE BUSINESS CASE FOR SUSTAINABILITY
The guide is organized by these three key steps:
Step 1. Lay the Groundwork
• Conduct a personal assessment
• Close gaps
• Outline a plan for success
Step 2. Develop the Content
• Establish a clear vision
• Conduct a business analysis (materiality, financials, tangible and
intangibles)
• Define Urgency (Why now?)
• Identify simple requests
Step 3. Build Support Buy-In
• Understand the audience perspective
• Deliver effectively
• Refine and persist

STEP 1:
LAY THE GROUNDWORK
CONDUCT PERSONAL ASSESSMENT
When you’re preparing to lay the groundwork, it is
important to start by conducting an honest personal
assessment. Many skills are key for effectively
engaging others in the business case for sustainability,
and no single person has them all. What are your
strengths? What are your weaknesses? Who do you
need to help you achieve success?
Subject matter expertise is necessary, but will deliver
only partial results. As a sustainability leader, it is
important to be able to sell the concept to others. It
is also important to indentify champions within the
company. Champions may include those within your
function but also look across the company for those
that may share your vision and could be influential
with others in helping your plan move forward.
Consider having someone on your team with the
required interpersonal skills and broad sustainability
expertise act as the catalyst, connector, and
collaborator to help drive change.
CLOSE GAPS
Once you have thoroughly assessed your strengths
and weaknesses, as well as your workload and
organizational dynamic, there are several ways you
can address identified gaps:
• Build your skills by training and mentorships,
• Find additional sources of support both internally
and externally. Internally, look for colleagues who
complement your skillset gap (e.g., marketing and
sales) or are better positioned to build support on
your behalf. Externally, look to NGOs, peers at other
companies, and consultants.
“[Unilever Sustainable Living Plan] gives a
tremendous sense of purpose to what we
are doing as a business that creates an enormous
energy here and employee engagement that I’m
sure will explain half of the growth we will be
producing.”
Paul Polman, CEO, Unilever
Building an Internal Team: A leading
food retailer created cross-organizational
strategy teams to develop two potential business
strategies – one where the company was taking
the lead, and one where they were matching
their competitors’ action. The teams were then
asked to recommend their choice and present to
senior leadership. By involving this cross-section
of employees in the strategy creation and asking
them for their recommendations, the retailer
leveraged the thinking of the teams, increased
the visibility and stakes for the individuals
involved, and ultimately built more commitment
within the team.
Choosing an External Partner: An external
perspective can provide a critical reality
check for your company, as well as help shape an
effective path forward. Walmart and McDonalds
continually engage stakeholders in their decision-
making. For detailed information on stakeholder
engagement, go to Section 6 of the FMI
Sustainability Starter Kit

OUTLINE YOUR PLAN FOR SUCCESS
In making the business case for sustainability, you
should think through all the steps that will lead to
success. What are the details of your end goal? What
are the critical milestones to help you get there?
What departments or people do you need to bring on
board? What information do you need to have and
share? If possible, share your ideas and get honest
feedback on how you can be most effective.
An unconventional approach may include taking your
target audience or key influencers on a “learning
journey” or a trip into the field for an organized tour
and discussion.
Think through your entire plan. What if you hit a hurdle
or get stuck? What is your Plan B? As has been said,
sustainability is a journey, not a destination. Carefully
consider feedback (both positive and negative) and be
prepared to continually refine your end goal and key
milestones.
The Sustainable Food Lab organizes
“learning journeys” where they can design
and facilitate a customized learning experience
with diverse stakeholders around the world.
“Seeing is Believing: CEOs’ Experience
Sustainability Challenges Firsthand” This
recent article in The Guardian details how
executives at Walmart and Coca-Cola are
changing policy because of what they see
traveling around the globe.
Wegmans’ Seafood Department regularly
visits suppliers’ operations and frequently
brings in other in-store employees as well
as those from customer relations to better
understand the issues surrounding sustainable
seafood and to better communicate with
customers. More information on these learning
journeys can be found in Section 1.

STEP 2:
DEVELOP THE CONTENT
ESTABLISH A CLEAR VISION
Establishing a clear vision that is aligned with your
company’s core business strategy, is the anchor for
your case. The best-known food retail example is
when Walmart embarked on its sustainability journey,
it tied sustainability directly to its core business
strategy of helping customers “save money, live
better” as their sustainability goals would help to
save their customers money and provide a better
environment for future generations.
Based on our survey of FMI members (Section 3);
the food retail industry is best positioned to:
• Improve its direct environmental and social impact,
• Produce food as efficiently and fairly as possible and
eliminate waste, and
• Encourage consumers to make more healthy, more
sustainable choices.
When framing your vision, be broad and expansive,
not single-issue focused. Keep it simple, but
compelling to as many people as possible. If you
cannot articulate your vision in one brief sentence, it
may need refinement.
CONDUCT BUSINESS ANALYSIS
The business analysis is the summary of the
anticipated costs and benefits associated with your
initiative. It should include both the tangible impacts
(e.g., financial accounting) as well as the often
intangible (e.g., impact on brand and reputation). This
analysis should cover both your recommendation, as
well as other scenarios, including most notably the
costs and benefits of maintaining the status quo.
As part of the business analysis, you should consider
a materiality analysis as well. Materiality is defined by
the Global Reporting Initiative as topics that have
a direct or indirect impact on an organization’s ability
to create, preserve or erode economic, environmental
and social value for itself, its stakeholders and society
at large. The Heinz Company conducted a materiality
analysis as part of their ongoing Corporate Social
Respondents cited cost reductions (74%)
and managing risks (61%) as two of the
three key drivers of their company’s sustainability
agenda. Eighty percent said new revenue
opportunities will drive sustainability initiatives.
And 66 percent have seen an increase in inquiries
about sustainability-related issues in the past 12
months from investors and shareholders.
Ernst Young “Six Growing Trends in Corporate
Sustainability”
Walmart’s partnership with J. Durban Farms
increased the amount of locally grown
peaches sold in their stores. Not shipping
peaches from states or countries that are
hundreds or even thousands of miles away has
reduced transportation and storage costs. This
has allowed Walmart to pass savings on to their
customers, as well as enabling the farmer to have
the security that his produce will be purchased by
a major retailer.

Responsibility strategic planning efforts. They
interviewed external as well as internal stakeholders to
understand issues and perceptions that resulted in an
“issues matrix” that informed the development of their
priority issues.
The following graphic outlines the different drivers of
business value: increased revenues, reduced costs,
competitive advantage, and risk management. A clear
return on investment is highlighted in the examples for
revenue increase and cost reduction. For competitive
advantage and risk management, the financial proof is
more intuitive and longer-term. In trying to determine
this business benefit, you can start with competitive
analysis to help build your case. Many companies,
such as Safeway, Kroger, Wegmans, and Publix,
are using sustainability to define their strategy for
long-term leadership and growth. Sustainability in
the food retail sector is rapidly moving from changes
within a company’s four walls to innovation throughout
the value chain.
“Being socially and environmentally
responsible is part of our foundation. It’s part
of our mission statement. It’s part of our company
strategy. And most importantly— it’s something
we’ll never stop doing.”
Ed Crenshaw, CEO, Publix Super Markets 2012
Publix Sustainability Report
“If you can show me the business case,
it’s too late.”
Bill Gates
Revenue Increase
• new revenue streams
• innovation
• differentiation
Cost Reductions
• increased efficiency
• waste reduction
• increased margins
Competitive Advantage
• license to operate
• enhanced brand/reputation
• energized workforce
Risk Management
• minimize regulatory risk
• decrease environmental liabilities
• secure supply chain
• Journey to Zero Waste
has $1 million reward for Hannaford
• Weis initial Energy Efficiency Program reduces energy
consumption by 3%
• Through innovative reclaim process, Kroger reduces
waste stream expenses, third party fees, leveraged tax
deductions, and streamlined processes, which have
resulted in more data control.
• Campbell’s saves $42.9 million over 5 years from
sustainability investments
• Ahold’s Peapod creates virtual supermarket aisles for
commuters, which has increased loyalty reward
• “Tesco.com provides all the growth in our core food
businesses these days.” Philip Clarke, Tesco CEO
• Whole Foods profit up 21% on sales growth
• Kellogg’s Raisin Bran finds double-digit growth with
focus on health
• Hy-Vee’s Garden Growth: Supporting the Community
• AHOLD USA on Dow Jones Sustainability Index for
Fifth Straight year
• Wakefern uses competitive analysis to determine their
sustainable seafood commitment.
• Loblaw is “One of 10 Most Admired Corporate
Cultures in Canada.”
• Starbucks’ Success Tied to Farmer Success (both risk
management and competitive advantage)
• General Mills works to secure critical resource of vanilla
bean from Madagascar.
• Delhaize America’s Sustainable Seafood Program
creates a more collaborative supply chain.

Numerous tools and resources are available to help
uncover the bottom-line benefits:
Bob Willard, a leading expert on quantifying and
selling the business value of corporate sustainability
strategies, has found that a typical company using
best-practice sustainability approaches can expect
increased profits, saved expenses, avoided
impending risks and enhanced brand value,
resulting in significant profit improvements. For
additional information on how to realize these profits,
Bob has designed online business case simulators
that are available for free on his website.
Forum for the Future has recently launched a new
toolkit as part of their “Better Decisions, Real
Value” project. Since sustainability typically offers
“softer” numbers than most financial executives are
used to,sustainability initiatives often get caught
in the vicious cycle of “prove the value before you
get approval, but you need approval to prove the
value.” This toolkit helps overcome these obstacles
by providing ways to handle the complexity and
uncertainty of sustainability, and by providing numbers
that are “good enough” to help a company take the
first step out of the cycle.
BSR in partnership with Futerra Sustainability
Communications, has created the Sustainable
Lifestyles Frontier Group. Working with leading brands
such as L’Oreal, Mars, Disney, eBay, and Carlsberg
Breweries, they are looking for ways to enable
sustainable lifestyles across industries and around
the world. In October, 2013, this Group launched the
Business Case Builder developed from over 50 case
studies and a series of global workshops with leading
brands. This tool features six steps towards building
the business case for consumer behavior change. It
categorizes case studies and, as part of its continual
development, asks other companies to share their
stories.
Harvard Business Review (HBR) published a Guide
to Building Your Business Case (an eBook with
accompanying Tools). This Guide can help you
1) Spell out the business need and align it with
strategic goals, 2) Gather feedback to shape and
test your idea, 3) Calculate ROI, 4) Analyze risks and
opportunities, 5) Gain support from colleagues, 6)
Present your case to stakeholders, 7) Secure the
resources your project needs. The downloadable tools
and templates provide examples of two well-wrought
business cases and their ROI worksheets.
Other sustainability strategy firms are also making
significant inroads into quantification of the
intangibles. Recent whitepapers include:
• PWC’s Sustainability valuation: An oxymoron?
• PE-International’s Ten insider tips for building the
business case for sustainability
Additionally, there are studies tying company value
to sustainability, such as CSR Hub’s recent study
correlating 28% of brand value to companies’
CSR performance.
Forum for the Future’s Better Decisions,
Real Value Project offers a Toolkit to Help
Companies Make Millions from Sustainability.
Greenbiz.com August 13th, 2010
Bob Willard’s Sustainability Advantage— what
to expect for a typical company:
1. Reduce energy expenses by at least 75%
2. Reduce waste expenses by at least 10%
3. Reduce materials and water expenses by at
least 10%
4. Increase employee productivity by at least 2%
5. Reduce hiring and attrition expenses by at
least 25%
6. Reduce strategic and operational risks

DEFINE URGENCY
In defining the urgency of your initiative, answer these
questions: of “Why should we do this?” “Why now?”
“With many competing priorities, why should this one
be addressed this year?” Like the other elements of
your case, ensure that you answer these questions
in a way that will resonate with your audience and
company culture.
At the highest level, there are macro trends that can
be cited for “why we should do this?” A short list is
included below, with additional content and detail in
Section 2:
• Increasing consumption of finite resources creates
stress on environmental systems critical to food
retailers,
• Increased awareness of sustainability issues has
raised consumers’ expectations of transparency
and performance,
• With increased expectations are specific interest in
hot-button issues and products,
• Digital trends will continue to transform the retail
experience, and
• Environmental issues are increasingly framed in
terms of impacts on human health.
Additionally, there are company-specific drivers for
urgency, including: competitive pressures, industry
trends, government regulation, and consumer
expectations. These are the primary drivers of change
for a corporation. Secondary drivers include the
impacts of NGOs and other external stakeholders,
ratings indices, and the influence of the media.
IDENTIFY SIMPLE REQUEST(S)
What is the simple, tangible request you have for this
particular audience to forward progress?
Focus your request on the critical few actions that
contribute to the outcome you want. It is about
building momentum, so tailor your request to your
audience. What are they uniquely positioned to
contribute and what will fit with their performance
targets? What will they see as ambitious, integral, yet
actionable?
Proactive vs. Reactive to Issues: Being
proactive provides an opportunity to lead
and shape the playing field. It requires stepping
into the unknown and committing resources
upfront. Waiting and being reactive allows
someone else to set the agenda. This approach
may appear easier, but it could be more costly
and damaging to a corporate reputation as you
try to manage real or perceived issues.
In 2012, U.S. natural/organic retail sales grew
13.5%, reaching a whopping $81.3 billion.”
SPINS NaturaLink
“Most businesses operate and say, ‘how
can I use society and the environment to
be successful?’ We are saying the opposite –
‘how can we contribute to the society and the
environment to be successful?’”
Paul Polman, CEO, Unilever

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STEP 3:
BUILD SUPPORT AND BUY-IN
UNDERSTAND AUDIENCE PERSPECTIVE
To confirm your key audience, think expansively about
the actions and resources that will be needed. It is
important to engage your CEO early in the process
as their support of your overall vision and urgency is
essential. Other key audience members may include:
Chief Marketing Officer, Chief Merchant, Chief Risk
Officer, Head of HR, Head of RD, etc.
Once you are clear on your key audience, understand
their needs. In other words, what is important to them
– not you – right now?
DELIVER EFFECTIVELY
The following provides a crash course in meeting
design and communication. Experts in engagement
spend years mastering effective techniques; we
would encourage you to consult advisors for key
interactions.
Meeting Design
Once you have identified who is important to engage
and what their current needs are, develop a goal
and objective(s) for the meeting. The goal should
be a proposed outcome of the meeting that everyone
who is attending can be excited about. It may
be an explicit goal, or a hidden one, but it should
be compelling, help you get closer to the overall
outcomes you want to achieve, and provide a clear
vision for a successful meeting.
At Walmart, sustainability remained an
abstraction for most people, and gained
little traction until they aligned it with who they
were as a company and their core competency
of driving waste out of their supply chain. Lee
Scott spoke to an audience of a thousand home
office associates and said, “You know, I’ve been
thinking about the fact that when we throw
anything away, I am paying for it twice – once
to buy it, and once for someone to take it away.
I don’t like paying for things twice.” The idea of
sustainability as ‘hidden costs’ was the most
impactful way to get traction in the culture.
The Sustainability Team at HEB developed a
short but sharp 30-minute presentation for
corporate leadership that focused on financial
benefits as well as brand enhancement to engage
leadership. For more information, please go to
Section 1.

Communication
Clear and compelling communication is paramount
to your success. Some tips in achieving this are as
follows:
1. Always have your elevator pitch ready. Practice
it and refine it as you go, and know how you want
to tailor it for each audience. Your pitch should
be supplemented by compelling stories and crisp
sound bites.
2. Make it a conversation. People tune out when
it’s one-sided. Ask questions and be authentic.
3. Frame what you say in terms of not only business
value, but also terms that resonate for the specific
business, company’s business model, and culture.
4. Use person-specific messaging, including
“what’s in it for you.”
5. Use positive psychology; focus on the strengths
that enable collective success—not on obstacles.
6. Don’t use jargon that is unfamiliar to audience.
For instance, if you are discussing sustainable palm
oil with a merchant, avoid sustainability acronyms
like “CSPO” and technical jargon like “mass-
balance.”
REFINE AND PERSIST (MAKE IT BETTER)
As you work to promote your approach to
management, you will receive lots of questions and
most likely hit some roadblocks. Some questions you
may hear may include:
1. Of my top priorities, sustainability does not top the
list. Why should I pay attention to this?
2. Do our customers care about sustainability? Are
they asking for it?
3. How quickly will the upfront investment be paid
back from a sustainability initiative?
4. Sustainability seems expensive. How do I reconcile
paying more in a cash constrained environment?
When you receive these questions, be prepared
and do not give up. First and foremost, understand
where their concerns are coming from. Ensure you
ask for feedback, and clearly understand potential
points of contention. Consider inviting an observer
to the meeting who can provide you with unbiased
feedback. Test ideas with them for what different
tactics could create a different outcome.
The key here is a balance of persistence and patience.
More groundwork may need to be laid. Use the “no”
as an opportunity to refine, tune, and make your case
better. It may be helpful to remember that the initiative
with the most commitment and staying power is the
one that’s been collaboratively shaped.
Safeway created a cross-functional
Corporate Social Responsibility (CSR) Task
Force, chaired by an Executive Vice President,
who convenes senior leaders across the company
to build on and accelerate the company’s
efforts on CSR. The Task Force meets quarterly
to discuss progress on current initiatives and
potential future initiatives. For more information,
please see Section 1.
Steve LaBard at Unified Grocers wanted to
draw attention to the broken pallets that
were being thrown away and not recycled with
the “whole” pallets in a warehouse. He brought
toothpicks in to show that every little bit counts
and added them to the recycling bin for pallets.
His initiative is now saving approximately $20,000
per year in waste hauling costs.

SECTION 1: COMPANY EXAMPLES
OF SUSTAINABILITY IN ACTION
(listed in alphabetical order)
5th Year on Dow Jones Sustainability Index
(September 2013)
Goal: Enhance Competitive Advantage by Achieving DJSI Listing
Overview
• The DJSI scores international companies on their economic, environmental,
and social performance. Ahold’s economic performance increased by 9%
from 2012; environmental performance went up a significant 15% over the
last year; and social performance was up 2% from 2012.
• Ahold scored especially high on two criteria: crisis management (for which
Ahold was awarded the highest score in its sector) and the sourcing of raw
materials.
• 2nd Year on Dow Jones Sustainability Index Europe
Business Case
• Listing and improvement demonstrates great progress on Ahold’s
Responsible Retailing Strategic Pillar
•  For more information, please contact Jihad Rizkallah at Ahold US.
Big Savings through Sustainability
Result: Saved $42.5 Million over 5 Years from Sustainability Initiatives
Overview
Components of savings include:
•  Advanced Battery Technology that had annual savings of $1.7 million
•  V8 Packaging Team eliminated cardboard insert for an annual savings of
$230,000
•  Energy Network Team found areas to reduce water, fuels, and electricity
used in production for an annual savings of $2.5-5 million
Business Case
Part of Social Responsibility Strategy of “Nourishing Community, Neighbors,
Employees and Planet”
•  For more information, please contact Dave Stangis at Campbell’s.

Implementing a
Sustainable Seafood Program
Goal: Gather Support from Suppliers
•  Delhaize America Sustainability Team developed and implemented a seafood sustainability program. The program involved
significant communication and buy-in from the supply base. It was important that ALL suppliers of products containing
seafood be on board and 100% compliant with policy.
•  Some suppliers were quick to sign on and get involved with the program. Yet, there was significant pushback from a small, but
vocal, percentage of suppliers. “Suppliers were hoping we would get tired and go away.”
•  A new category manager was hired and was able to quickly identify the issue – suppliers were worried that the effort would be
costly and cause multiple problems.
Lay the groundwork
•  Took the time needed: It was better to build consensus and seek out champions, than
unilaterally drive progress as a sustainability team.
•  Educated each other and continually reassessed situation: Met with Seafood CM several
times to better understand each other’s respective disciplines; Sustainability provided background
on the program and its importance; Seafood CM provided commercial context and identified areas
where plan objectives could adversely impact business.
Develop the right
content
•  Found where business and sustainability overlapped: Found the convergence of commercial
and sustainability interests, which led to a much stronger program that was championed by the
category. This reinforced the fact that the, “why this is good for the business” cannot be
overemphasized.
Build support and
buy-in
•  Always prepared: Brought up the business case at every opportunity.
•  Persisted: Creating momentum requires lots of conversations (at every level).
•  Excellent recognition and brand value enhancement for the work; suppliers making great progress
•  Better alignment: Category is now “pulling” for more/better versus Sustainability “pushing.”
•  For more information, please contact George Parmenter at Delhaize America.
Securing Critical Vanilla Supply Chain
Overview
BACKGROUND
•  Madagascar produces more than 80% of the world’s vanilla.
•  Vanilla is a key ingredient in General Mills’ Haagen-Dazs ice cream.
APPROACH
•  Project is part of GMI’s broader sustainable sourcing commitment
•  Collaborative effort between General Mills, Virginia Dare (flavor and extract
company), and CARE International (NGO serving poorest communities in the
world)
•  Training and education provided to help farmers produce more sustainable and
higher quality vanilla
•  By adding value at the farm level, vanilla growers can significantly increase their
incomes.
Business Case
•  Ensure a high quality vanilla supply for the business and for future generations.
•  Foster greater economic vitality for smallholder vanilla farmers.
•  Create long-term economic, social, and environmental value.
•  For more information, please go to website or contact Steve Peterson at General Mills.
Goal: Ensure Sustainable Supply of Vanilla from Madagascar
COMPANY EXAMPLES OF SUSTAINABILITY IN ACTION

Moving to Zero Waste
Goal: Build Commitment for a Zero-Waste Goal
•  Wasted food at Hannaford Supermarkets stems from the sheer volume of fresh items the stores handle. With 181
stores and over 27,000 employees in Maine, New Hampshire, Vermont, Massachusetts, and New York, Hannaford
focuses primarily on fresh produce, meat, seafood, and deli.
•  Hannaford diversion by recycling was above 65%, but the company recognized it could do better. By paying close
attention to waste bins, management became aware of the large amount of discarded food. “If we do everything
correctly, we shouldn’t have this much waste,” says Kasey Harris, Hannaford’s Sustainability Program Specialist.
•  When pursuing LEED EBOM certification for 2 specific stores, the company noticed waste diversion numbers went up
significantly.
Lay the groundwork
•  Get senior support: Parent company has identified sustainability as a key component
of the company’s business strategy
Develop the right content
•  Articulate business value of zero waste: Cost savings, improved brand equity,
associate engagement, and staying ahead of pending legislation. Identified potential
for over $1M in savings
Build support and buy-in
•  Conducted pilot to prove concept: After noticing increases in waste diversion in 2
stores as part of pursuing LEED EBOM certification, tested the same process with a
“district” comprised of 11 stores in central Maine, the test district showed excellent
results in both recycling percentages and reduction in waste volume.
•  Company committed to moving to Zero Waste. Increased waste diversion for recycling and composting from
61% to 79%, well above industry average of 45%
•  Excellent enthusiasm and excitement from associates, which will likely lead to increased retention and
employee satisfaction at work
•  For more information, please contact George Parmenter at Hannaford.
Making the Business Case
for Sustainability
Goal: Engage Leadership
•  Educated leadership about the business case for environmental sustainability
•  Helped leadership understand that sustainability is becoming more important to customers and necessary for long-term business
planning
•  Assured that environmental sustainability is not seen as a “tree hugger” charter
•  Developed an elevator speech that was put both in financial terms as well as brand enhancement
Lay the groundwork
•  Developed short presentation: Developed impactful 30 minute PowerPoint presentation;
easily tailored to different audiences
Develop the content
•  Stressed financial benefits: Main focus of presentation was financial benefit of sustainability
(e.g., savings from recycling, etc)
•  Included other intangible benefits: Emphasized benefits for hiring and retention and being
responsive to customer inquiries
•  Provided long-term view: Include long-term risks to the business and impact on “your kids
and grandkids”
•  Tailored message to the audience: Each presentation was slightly different and included
updates specific to a particular region, product, etc. For example, highlighted emerging supply
chain risks to merchants and financial benefit of recycling to store managers
•  Offered to help: Offered to be a resource that can help audience achieve their goals
•  Increased awareness and interest
•  Store leaders asking for help to respond to customer and employee requests (e.g. additional
commodities for recycling)
•  For more details, please contact Susan Ghertner at HEB.

Enhancing Brand Through Community Gardens
Goal: Support Development of Local Community Vegetable Gardens
Overview
•  Employees saw community gardens as a way for stores to support local families
•  Provide land adjacent to stores and store dietitians for support and education
•  Work with local non-profits to connect students, families and immigrant
communities.
•  Hy-Vee works with other local businesses that donate gardening supplies
Business Case
•  Effort part of Hy-Vee’s combined healthy living and sustainability effort
•  Efforts summarized at www.Hy-Vee360.com
•  Program helps build brand awareness and loyalty within community
•  Hy-Vee recognized for promoting health and local growing in its communities
•  For more information, please contact Mike Smith at Hy-Vee.
Kellogg’s Raisin Bran Finds
“Healthy Growth”
Result: Double Digit Growth with Unique Nutrient Claim
Overview
•  Kellogg’s Raisin Bran was known to appeal to consumers over 50 and was
perceived to have health benefits similar to many other cereals. However, it
lacked a distinguishing nutrient claim.
•  The nutrition label for Kellogg’s Raisin Bran original showed a higher level of
potassium than most other cereals, driven by the combination of wheat and
raisins in the product. Potassium was identified as a nutrient consumers age 50+
were seeking to increase in their diets. A slight recipe adjustment achieved a
claimable “good source of potassium,” with no impact on flavor or texture.
•  With this differentiated nutrient claim in the cereal category, a full media plan was
deployed.
Business Case
•  Retail scanner data for Kellogg’s Raisin Bran Original before the communication
launch, showed that the product was in decline versus the previous year. During
the initial 12 weeks of the new communication, retail sales showed a near double-
digit increase versus the previous year (an overall +13ppt change in retail sales
performance).
•  Driven by the increased sale of Kellogg’s Raisin Bran original, the total Kellogg’s
Raisin Bran franchise grew significant market share in the ready-to-eat cereal
category.
•  For more information, please contact Jeff Delonis at Kelloggs.

Innovative Reclaim Process
Goal: Create Compelling Case to Bring Reclaim Process In-house
•  Dry groceries and shelf-ready staples that were safe to eat, but unsalable, were sent to external reclaim centers, where they were
processed for vendor credits, sold by third parties to salvage markets, or donated to food banks. This resulted in some donations
to food banks, but it was also a time consuming, expensive, duplicative and difficult-to-manage process for the company.
•  Many apprehensions and questions about pulling the process “in-house”: Can food banks deal with Kroger directly instead of 3rd
parties? Is there a risk of losing revenue or increasing costs? Are there brand risks for suppliers?
Develop the
content
•  Identified and answered key questions
•  Apprehension to pull process “in-house” ! showed more control of data/product and no new long-term
head count to manage process
•  Could food banks do it? Did they want to ? ! showed how it facilitated increase in donations, reduction of
trash expense, expanded relationship with retailer
•  Lost revenue ! showed risk associated with salvage operations, as they became more and more value
competitors
•  Initial Costs ! initial investment for training and software was offset by long-term hauling costs, third-
party fees
•  CPG’s brand management guidelines ! partnered with Feeding America in an effort to change their rules
to allow for donation
Build support and
buy-in
•  Used cross-functional team to show long-term benefit of taking process in-house
•  Tailored case to win over hearts and minds: educated minds on operational efficiencies and overall
cost reductions, while captured hearts through expanding and increasing donations and commitment to
the communities served.
•  Great social and environmental benefits: Kept organics out of landfills; reduced transportation emissions due to
long hauls from DC to reclaim centers; increased availability of safe, nutritious food to hungry neighbors;
expanded relationships and partnerships locally
•  Financial benefits: Reduced waste expenses, third party fees, transportation costs, leveraged tax deductions,
streamlined processes resulting in more data control
•  For more information, please contact Suzanne Lindsay at Kroger.
Top 10 Canadian Corporate Cultures
Goal: Effectively Engaging Employees around Sustainability
Overview
•  CSR is an integral part of Loblaw's business practices and is based
on five principles: Respect for the environment, source with
integrity, make a positive difference in the community, reflect the
nation’s diversity, and be a great place to work.
•  Have once-a-year Tell It Like It Is survey and online CSR training
for new employees
Business Case
•  86% of employees participate in “Tell It Like It Is” Survey
•  It’s working: Employees report improvements in areas highlighted
in survey
•  For more information, please contact Sonya Fiorini at Loblaw.

Launch of Virtual Interactive Supermarket
for Commuters
Goal: Increase mobile order size
Overview
• Ahold subsidiary is #1 U.S. online grocery
• Features ~70 items with links to 20,000 additional items
• Customers use app to scan items that they then add to virtual shopping cart
• Over 100 virtual supermarkets in commuter rail stations in Boston,
Connecticut, New York, New Jersey, Philadelphia, Washington, D.C., and
Chicago.
Business Case
• Expected to increase mobile order size
• Drives loyalty: 90% who scanned an item ordered from Peapod again
•  For more information, please contact Jihad Rizkall
Source:
McKinsey
Retail
Prac5ce

peapod.com
Improving Food Recovery Efforts
Goal: Build Support for More Ambitious Targets
•  The cross-functional CSR Task Force chaired by an executive vice president in the organization, convened senior
leaders across the company to build on and accelerate the company’s efforts. The task force meets quarterly to discuss
progress on current initiatives and potential future initiatives.
•  On the topics of food waste/food recovery, the organization wanted to build on existing efforts and move from compost to
higher uses of the organic materials based on the EPA Food Recovery Hierarchy
Lay the groundwork
•  Current reality: Identified current practices in place and results of the practices. Compared
Food Waste: Tier 2 Assessment /BSR Report to company results
•  Pre-meeting reviews: Reviewed deck with executive team prior to delivery of the message
to the CSR Task Force
Develop the content
•  Used video: Showed a portion of the TED video featuring Tristram Stuart: “The global food
waste scandal”, to set up the issues/challenges that exist globally
•  Shared current state: Practices in place within the organization and results (such as
composting, food to feed, and donation programs)
•  Used legitimate 3rd party expertise: Walked through the EPA Food Recovery Hierarchy
•  Recognized success: Recognized current efforts and challenged team to move from
composting to higher needs
•  Next step objective is to identify baseline information for each item on the EPA hierarchy and goals to achieve
(% increase or decrease)
•  Team was identified to begin working on the initiative
•  For more information, please contact Chris Ratto

Ethical Sourcing and Farmer Support
Goal: Source 100% Third-Party Certified or Verified Coffee by 2015
Overview
•  Starbucks is committed to buying and serving high quality, responsibly grown,
ethically traded coffee to help create a better future for farmers and a more
stable climate for the planet.
•  The company’s long-term success is linked to the success of the hundreds of
thousands of farmers who grow the company’s coffee. That’s why they work
on the ground with farmers to help improve coffee quality, ensure
environmental best practices, and invest in loan programs for coffee-growing
communities.
•  Third parties include: C.A.F.E. Practices, FairTrade or another externally
audited system.
•  In 2011, Starbucks sourced 86% of its coffee as third-party certified.
Business Case
•  “It’s not just the right thing to do, it’s the right thing to do for our business. By
helping to sustain coffee farmers and strengthen their communities, we
ensure an abundant supply of high-quality coffee for the future.”
•  For more information, please go to Starbucks’ Ethical Sourcing Fact Sheet .
Rapid Growth of Tesco.Com
Goal: Tesco.com = the engine of company’s future growth
l
“Tesco.com provides all the growth in our core food businesses these days” Philip Clarke, Tesco CEO
Overview
•  Built five “dark stores” (grocery stores that are not open to the public and are
used to fulfill online stores)
•  Installed automated picking and handling system at two new dark stores,
doubling pick rates
•  Transferring online shopping operations from nearby local stores
•  Invested $1.5 billion in makeover of stores and $879 million to accelerate the roll-
out of digital services
•  Adding 8,000 full-time equivalent staff
Business Case
•  All 5 dark stores among Tesco’s top ten sites by revenue in 2012
•  Achieved 57% market share of online grocery shopping
•  Online sales expected to double in the next five years
•  For more information, please go to Tesco.com

Establishing a
Sustainable Seafood Commitment
Goal: Build Internal Support
Lay the groundwork
•  Educated, using credible external advisors: To further understand the issue, Wakefern
engaged external NGOs with an in-depth understanding of the issue, scientific credibility, as well
as a keen awareness of business realities (e.g. Marine Stewardship Council, Global Aquaculture
Alliance). Additionally, materials from credible resources such as the
National Oceanic and Atmospheric Administration (NOAA) were reviewed and shared with key
decision-makers.
•  Engaged procurement first, then engaged the rest of the organization: Started working first
with the procurement division to gain support and understanding of the issue. Then was able to
engage Wakefern’s leadership team and its ShopRite store owners to gain consensus.
Develop the content
•  Used competitive analysis: “Nobody wants to be left behind.” A thorough competitive analysis
formed the backbone of the business case. In addition, the group discussed and determined
where they wanted to lead and where the data was incomplete.
Build buy-in and
support
•  To ensure support from the entire organization, input was received from all impacted internal
stakeholders including various product divisions and ShopRite store owners.
on the importance of conserving energy
Lay the
groundwork
•  Established a baseline: Completed Greenhouse Gas Emissions assessment according to WRI protocols
and developed a baseline report for company’s carbon footprint and energy usage
•  Established clear responsibilities: Stores have a designated Energy Captain to promote energy
awareness and conservation at the store level.
•   Developed an easy-to-use Energy Awareness Toolkit including:
-   Energy Awareness Manual for every store’s use
-   Daily store walkthrough checklist, mission statement, monthly energy conservation report, energy
saving opportunities, and additional recycling program information, use and distribution of FMI’s
“Energy Management in Your Store” video
-   Introduction of company mascot, Captain Wattley, as an icon to identify sustainable programs
throughout the company
Develop the
content
•  Focused on the financial benefit: Measured energy savings and reduction in store expenses through
documented reduction in energy use. Reducing energy consumption by 3% reduced operating costs.
Build
support and
buy-in
•  Selected natural leaders: Selection of Energy Captain role was a key factor in associate engagement
•  Promoted engagement: Senior Management supported Middle Management in Energy Awareness training
of store associates. Established a direct line of communication with store level to provide feedback.
•   Tracked progress: Provided stores with continuous energy usage data and highlighted successes
companywide via internal newsletters and email
•  Direct reduction in each store’s bottom line by 3-5% determined by monitoring store’s energy performances
•  Weis will build on this success and expand the scope to include all store-level sustainability initiatives
•  For more information please contact Patti Olenick at Weis.
•  Weis Markets operates 166 stores in 5 states with over 16,000 associates in the mid-Atlantic region.
•  Energy is one of the company’s largest controllable operating costs. The key objective was to create an
energy awareness program to reduce energy consumption in stores.
Goal: Reduce Operating Costs and Company’s Carbon Footprint
Creating Energy Awareness Program

• For more information please go to Wegman’s Sustainability Website or contact Jeanne Colleluori
Result: More Secure Supply Chain and Empowered Employees
“Learning Journeys” into the Supply Chain
Overview
•  Wegmans’ Sustainability Mission Statement includes “…we all have a responsibility to
be aware and be accountable. We promise to take steps to protect our world for future
generations—it's part of our commitment to make a difference in every community we
serve.”
•  This statement is a guide to promoting the long-term well-being of people, the
environment, and the company, including sourcing from “trusted partners.”
•  Since Wegman’s first seafood department opened in 1974, it wanted to provide the
freshest, highest quality, affordable seafood available.
•  To ensure it lives up to this goal, buyers, along with in-store employees and consumer
affairs, regularly visit suppliers.
Business Case
•  Securing Supply Chain: Wegmans seafood buyers recognize the importance of
nurturing long-term relationships with suppliers, visiting and auditing facilities, and
relying on codes of practice and third-party audits to implement and verify Wegmans’
specifications and suppliers’ capabilities.
•  Defining What is Sustainable: With today’s global economy, going out into the world to
see the alternatives and understand what is “good” is essential to understanding what is
truly sustainable. ·
•  Empowering Employees: Wegmans’ seafood department employees are provided with
information to make them confident in their product and pass that confidence on to
customers.

SECTION 2:
SUSTAINABILITY MACRO-TRENDS
Increasing consumption of finite resources creates stress on
environmental systems critical to food retailers.
Increased awareness of sustainability issues has raised
consumers’ expectations of transparency and performance.
With specific interest in hot-button issues and products,
comes increased expectations.
Digital trends will continue to transform the retail experience.
Environmental issues are increasingly framed in terms of the
impact on human health.
1

2

3

4

5

Five sustainability mega-trends that affect food retailers:
1

Increasing global consumption of finite resources…
1. “Humanity Now Demanding 1.4 Earths.” Global Footprint Network, Nov 30, 2011
The Earth is a closed system. It is estimated that 1.4 Earths would be required to sustain our
current rate of consumption.1 Population and economic development will increase our impact on
the environment, thus we can expect a widening global deficit of resources.
Image source: “New Limits to Growth Revive Malthusian Fears,” WSJ, March 24, 2008
‣  Increasing global consumption due to:
–  Exponential population growth, including the rise in life expectancy
–  Rise of affluence/middle class in developing countries
‣  Consumption patterns are shifting due to:
–  Urbanization
–  Redistribution of wealth from west (US, Europe) to
east (China)

…creates stress on environmental systems critical to
food retailers
Relevant environmental systems affected by consumption trends:
Atmosphere, Climate Change: A byproduct of consumption is more carbon
particles (greenhouse gasses) in the atmosphere and the associated climate
change. Impacts on food sourcing include:
‣  Increasing severe weather (e.g., floods) and disruptions in global weather
patterns
‣  Shift and reduction in arable land and production capacity
‣  Change in ocean chemistry (sea level rise and acidification)
‣  Freshwater scarcity and severe droughts
Sources: 1) McKinsey, “Charting Our Water Future.” 2009. 2) IEA, from WEF “Summary Report of the Sustainability Summit [at Rio].”;2012.
1

Water Scarcity: In 2030, global water requirements are expected to
exceed reliable supply by 40%1. Impacts on food sourcing include:
‣  Lowered agriculture yields and a shift in available food supply
‣  Droughts and severe disruption to regional ecosystems
‣  Competition with non-agriculture demands for water
‣  Nutrient depletion in upper watersheds
Energy: Global energy needs will be 40% higher in 2030; under business as
usual, 75% of global increase will be met through fossil fuels.2 Impacts of food
sourcing and retail operations include:
‣  Reliance on fossil fuels will increase carbon in atmosphere, which can exacerbate
climate change impacts on food production (as described above)
‣  Predicted energy demand could lead to higher fuel costs in supply chain and store
operations
Source: “China and India Account for Half of Global Energy Growth Through 2035.” EIA,
Increased food prices
‣ Rising global demand could lead to volatile food
prices and pressures on quality and safety (e.g.,
rise in commodity index)
‣ Reduced supply of food due to climate change,
water shortages, and declining aquaculture (e.g.,
corn prices in 2012 due to drought in Midwest)
‣ For example, the USDA expects unit costs of
cereal production to rise by up to 15% by
2016-17, in part because of changes in supply
and demand1
Stress on environmental systems will continue to
affect food retailers in direct and indirect ways:
How
individual
companies
respond
to
environmental
trends
(e.g.,
through

innova5on,
and
partnerships)
will
inﬂuence
proﬁtability
and
longevity.

1

The full impact of increasing global consumption of finite resources will continue to evolve in ways we
cannot yet predict. Some impacts that seem likely include:
Rising living standards in the developing world
have boosted demand for resources, lifting
prices. CRB Spot Index of prices for 22
commodities, including oil, steel, and hogs:
Increased operational costs:
‣  Possible increases in energy costs due to rising demand, which could result in
higher operational and transportation costs
‣  Possible increase in operational costs due to regulation; although difficult to predict,
introduction of new legislation on carbon, waste (e.g., organics to landfill), recycling
and transparency/reporting could also increase operating costs
Sources: 1) “Rising Food Prices: A Global Crisis.” Overseas Development Institute. April 2008.
Source: http://buzz.money.cnn.com/2012/07/10/corn-
prices-drought/
Source: http://www.fafcosolar.com/learn-more/why-is-
now-the-best-time-to-buy-solar-energy-products/

2

Consumers increasingly aware of sustainability, awareness
reflected in purchasing choices and reporting expectations
Consumers are evolving. Their awareness of sustainability issues
(especially climate change) continues to grow:
‣  Climate issues are now common in headlines, having been connected with
Hurricane Sandy (“It’s Climate Change, Stupid”), melting icecaps, and extreme
droughts.
‣  Over 60% of US adults think human activity has had a negative effect on the
natural environment in the past 10 years.1
Source: Fair.org, “US Climate Change Coverage in the
‘00s”. Maxwell Boykoff.
As awareness increases, so does consumer expectations of retailer performance:
‣  In 2009, 54% of consumers considered sustainability to be one of their decision-making factors in product and store
selection.2
‣  92% of consumers agree with the statement that it is important for the U.S. food industry, both food manufacturers and
supermarkets, to be more proactive about addressing environmental concerns.3
‣  87% say they want a company to support issues based on where its business can have the most social and/or environmental
impacts.4
Corresponding to consumers’ (along with investors’, shareholders’, NGOs’, and governments’) demands for higher
performance from retailers, comes an increased expectation of transparency and reporting.
‣  73% of consumers want companies to provide more environmental information on product packaging to help inform their
shopping decisions.5
‣  71% wish companies would do a better job helping them understand the environmental terms they use to talk about their
products and services.6
Sources: 1)“As Rio Summit Commences, Americans See Environment Deteriorating.” Washington Post, June 19, 2012; 2) GMA/Deloitte Green Shopper
Study, 2009; 3) FMI-Harris Poll, 2007; 4) Cone Cause Evolution Survey 2007; 5) need citation; 6) need citation
A growing sentiment among forward-thinking businesses: If you are going to be naked, you
might as well be buff.
‣  More companies are voluntarily reporting data, and they are
expected to report performance results.
‣  Brands are more accountable for their actions and those of direct
and indirect suppliers.
‣  Stakeholders, including investors, increasingly consider
environmental, social, and governance (ESG) data.
‣  The public and non-profit sector are more sophisticated in monitoring
performance.
‣  Companies increasingly see transparency not only as a risk, but also
as an opportunity to build trust and loyalty.
New era of transparency: performance accountability
25
Participation in disclosure programs, like the Carbon
Disclosure Project, has grown exponentially, along
with supplier scorecard and sustainability indices.
Source: Carbon Disclosure Project, https://www.cdproject.net/en-US/Pages/
HomePage.aspx
Given the growing influence of environmental responsibility in the
public consciousness and brand perception, retailers should stay
abreast of stakeholders’ evolving expectations of reporting.
2


3
Complementary to consumers’ increased awareness are
specific interest in hot-button issues and products.
Confidential
26
Forward-looking retailers are keeping an eye on environmental and social hot-button issues that are increasingly
important to consumers and other stakeholders. Some of these issues include:
Although hot-button issues and products represent risk, they also
represent potential upside and a new source of growth, if retailers can
cater to their consumers’ interests.
Product Water Carbon Waste GMO
Animal
Welfare
Deforest-
ation
Ecosystem
Health
Local
sourcing
Social /
Labor
Palm oil and Soybean ! ! ! ! ! !
Seafood ! !
Beef ! ! ! ! !
Packaging ! ! ! ! !
Paper, Forest Products ! ! ! ! !
Eggs ! !
Bananas ! ! ! !
Coffee, Tea ! ! !
Cocoa ! ! !
•  Water intensity
•  Carbon, energy intensity
•  Waste, including food waste and
packaging
•  GMO
•  Animal welfare
•  Deforestation
•  Ecosystem health
•  Local sourcing
•  Social/Labor rights
Particular products that correspond to one or more of these issues are drawing increasing attention. Retailers
should consider their position on the sourcing of these products:
Digital trends will continue to transform the retail
expectations for environmental performance.
Confidential
27
Second, more people use social media to inform decisions and share opinion. Digital
connectivity and social media give consumers increased opportunity to spot and report
environmental performance, compounding the previous mega-trend regarding
performance accountability and transforming how companies interact with their customers
and with society.
Movements in digital will continue to empower customers in their quest
for transparency about hot-button issues, creating an evolving
opportunity for retailers.
4

First, more consumers are making purchases online and through
handsets. By 2013, more than 2B globally will have made a
mobile purchase and e-commerce spending will reach $278
billion by 2015. With online retail comes an increased
expectation of product information at their fingertips,
including sustainability and social performance.
Two digital trends will especially impact customer’s expectations of retailers’
sustainability performance.

We see movement away from “environment for environment’s sake” and towards how
the environment impacts human health, which complements existing food retail
priorities around health, obesity, and ingredient reformulations.
‣  Environmental health issues are tied to more inputs (e.g., BPA, phthalates, formaldehyde,
parabens) and the definition of “safe” tolerance levels continues to narrow (e.g., lead) as
our scientific learning evolves.
‣  Governments and advocacy groups are explicitly reframing environmental issues (such as
climate change) as a human health issue to increase saliency.
‣  Prominent non-profits have reframed how they communicate their conservation mission,
from an orientation around saving the planet to a focus on how conservation serves human
health and security.
‣  Hot-button environmental issues such as organic food, are framed as health issues, as
opposed to environment-oriented issues like pollution and watershed health.
§  For example, a Nielsen study has found that consumers are driven to organic food purchases
because they are healthier choices and significantly less because of socially conscious
reasons such as the environment.1
Connecting human health and the environment
Confidential
28
Health and the environment will continue to be closely linked,
making environmental performance highly relevant to retailers,
especially around food and personal products.
Source: 1) The Nielsen Company, Global Online Survey. Q1 2010
5


SECTION 3:
FMI MEMBER SURVEY
Executive Summary of FMI Member
Survey
•  34 members, representing all segments of FMI member companies, responded to the survey;
generally, there were “expected” results:
•  Majority report great progress on reducing impact within 4 walls, may be attributed to
ease of quantifying and influencing ! Not a priority focus area for toolkit
•  Biggest opportunities for impact are where the business case is the least tangible and/
or longer term
•  Employees ! limited perceived value, important but not a priority in terms of where to focus.
Maybe because hard to measure?
•  Growth/new products + communications ! big opportunity for improvement + area you see as
a top priority (helping customers make better choices)
•  Sustainable sourcing ! limited perceived value (maybe because longer term?) but biggest area
for impact (produce food efficiently)
•  What is needed from the toolkit to make the business case is:
•  Elevate importance of sustainability: create urgency and/or demonstrate value
•  Make better use of limited resources (most organizations are thinly staffed)
•  Integrate sustainability into the day-to-day business
The food retail industry is uniquely
positioned to make a difference…
43%
65%
66%
71%
76%
79%
Other
Inspire others to “raise the bar” on sustainability
initiatives (e.g., companies in other industries)
Enhance social wellbeing of employees, customers
and others constituents
Reduce your direct environmental and social impact
Produce food as efficiently and fairly as possible and
eliminate waste
Drive consumers to make more healthy, more
sustainable choices
Where is the industry positioned to make a difference?
(Percent of respondents that answered 4 or 5)
What progress has the industry made with those topics that matter most?
1
2
3
4
5
6

Opportunity for improvement in areas
where the industry can most make a
difference…
Encourage consumers to make more healthy,
more sustainable choices
1 2
Produce food as fairly and efficiently as possible
Where have you made the most progress:
(Percent of respondents that answered 4 or 5)
6%
21%
15%
26%
29%
Educate and engage customers about what they can do
to support sustainability
Source more sustainable products and/or packaging that
already exist
Actively partner with suppliers to create more
sustainable products and/or packaging
Collaborate with industry, including competitors, to
change the entire supply chain
Partner with NGOs, government and/or other external
stakeholders
Most progress has been achieved
“within your 4 walls”…
24%
53%
56%
65%
91%
Engage and educate employees
Influence store design and development (e.g.
LEED)
Reduce impact of your operations (e.g.
reduce waste, in-store packaging, recycling)
Meet compliance
Find quick wins (e.g. energy efficiency)
Where have you made most progress:
Percent of respondents that chose rating 4 or 5
Not surprisingly, companies have made the most progress in quick wins. Some progress has been made
in further reducing impact of own operations, limited progress in employee engagement.
3 4
FMI MEMBER SURVEY

Drivers of value that are harder to quantify
(in terms of $) or longer-term tend to have
less importance
0% 20% 40% 60% 80% 100%
Employee hiring and retention
Other
Supplier relationship / reliability
Long-term security of supply
Mitigate brand risk
Growth (new products, etc)
Competitive advantage / brand benefit
Cost savings / efficiency
Most important drivers of value:
(Percent of respondents that chose rating 4 or 5)
“Thinking is generally skewed
toward short-term wins; many
believe that sustainable must mean
more expensive.”
Companies have a harder time making the business case in areas that have the
biggest impact: sustainable sourcing and consumer sustainability.
3 “4 walls”
1 Consumers
2 Sourcing
4 Employees
What is needed now?
25%
52%
62%
71%
79%
88%
Other
Develop your personal leadership and
influence skills
Access to additional resources and
funds
Make better use of limited resources
Embed in the business processes and
day-to-day decisions
Elevate the importance of sustainability
in your company
What is required to achieve your objectives:
(Percent of respondents that chose rating 4 or 5)
Create urgency and find
ways to demonstrate value
of intangibles.
Engage employees to
help, identify external
resources.
Engage others in the
organization, develop the
right systems/processes.
Toolkit objectives
FMI MEMBER SURVEY

Topics where food retailers need the most
help creating the
business case:
5
10
10
16
18
19
20
20
23
0 5 10 15 20 25
Animal welfare
Local sourcing
Recycling / EPR
Alternative energy
Water
High-impact commodities (e.g., palm oil)
Sourcing more sustainable products
Waste / food waste
Packaging
Topics where you most need help:
(Total number of responses)
FMI MEMBER SURVEY

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