...comes great responsibility. And glossy brochures are full of soothing assurances about the centrality of corporate social responsibility to company practices. But there is a major blind spot in their current strategies. Liz Hamson reports

They all have one. Often it takes the form of a glossy brochure full of idyllic green meadows, healthy livestock and happy farmers and takes pride of place in company reception areas or on its web site. But are corporate social responsibility policies all they are cracked up to be?
The verdict among senior industry figures and speakers at last week’s Westminster Diet and Health Forum on CSR and the food industry is: maybe not.
Many retailers and food manufacturers are rightly proud of their strategies and have received plaudits for their treatment of staff, customers and the environment. But, argue some commentators, policies remain at best patchy, and at worst highly selective, amateurishly articulated and poorly executed. Unilever Ice Cream and Frozen Foods head of communications, Helen Lo, says: “The emphasis has been on CSR reports. But is putting together a glossy report the right way of doing it? There seems to have been a focus on communicating policy rather than delivering it.”
Worse, argued several speakers during a timely and powerful debate ahead of the publication of the OFT report on the supermarkets code of practice, expected next week, many retailers seem to have developed a sizeable blind spot when it comes to the way they treat suppliers.
If supermarkets want to be seen as taking CSR seriously, they need to apply their policies far more widely and behave more responsibly towards suppliers, said Lord Whitty, minister for farming, food and sustainable energy, Defra (see news, March 12, page 6).
“There’s some outrageous behaviour out there. We’ll need to look at the OFT audit on the code of practice to see if any immediate steps need to be taken,” he said, adding that the industry as a whole needed to engage more constructively with government or risk a row such as the one that preceded the publication of the Public Health White Paper. “If industry is closing its mind to what is coming from government, we will have a stand-off,” he said, adding that it was the responsibility of large companies to show the way. “Big companies have to lead. Big companies are in the frame here.”
Others agreed that abuse of the supermarkets code of practice risked making a mockery of CSR. “There is a fundamental disconnect between corporate social affairs and the platitudes and verbosity of retailers,” said Richard Lowe, As the most powerful players in the supply chain, retailers bore the greatest responsibility, pointed out Fiona Gooch, private sector policy advisor, Traidcraft. She cited UK Food Group statistics showing that across Europe there are three million food and drink producers supplying 160 million consumers via just 110 buying desks. “This bottleneck has critical implications,” she said. “We need to have standards for buyers, not just suppliers. We have to recognise what buyers do and need to think about the long-term relationships we have with suppliers.” She added: “We need key performance indicators and a redress mechanism where stakeholders can say: my rights are being violated.” Many felt that, while CSR policies had come on in leaps and bounds in terms of the way staff, customers and the environment were concerned, they had run aground when it came to suppliers and the “brutal trading interface”, as Lowe put it. He highlighted the inherent paradox in expecting young buyers on low salaries to change the way they behave towards suppliers. “They’re chasing a 60-70% bonus. If you are a young buyer, you’re thinking about your new car, your deposit for a house.” Unless supermarkets ditched this reactive approach for a more proactive one, the whole supply chain would be in trouble, warned Dr Andrew Fearne, Centre for Food Chain Research, Imperial College. “If you don’t have an integrated supply chain, you don’t have a sustainable supply chain long-term. Retailers don’t like mutual dependence, but it creates stability and confidence,” he said. “Exploiting the trust of suppliers fails in the long run. Suppliers will do their damnedest to find an alternative route to market - in the end the bully loses.” There is no reason why an EDLP player could not have just as good a CSR reputation as any other retailer, he added, citing research ranking one multiple alongside a small niche player, though both scored poorly for their high turnover of buyers. One area in which the supermarkets have shown they can be responsible is local sourcing, he said, namechecking Waitrose and The Co-operative Group’s strong relationships with regional suppliers. But, in general, the consensus is that supermarkets need to do a lot more by way of extending this fair treatment to larger suppliers. Any whiff of hypocrisy and retailers will be held to account by any one of a legion of stakeholders. None of the speakers were under any illusion that it would be easy to fulfil these many responsibilities -- and still satisfy the expectations of the shareholders. But the repercussions would be serious if retailers did not address the issue of the wider supply chain, Steven Francis, partner at law firm Eversheds, said. “Regulatory risk has increased. If you get it wrong, you have committed a criminal offence. Once upon a time, you could expect officials to execute discretion. These days, you cannot.” Nor can retailers treat CSR as a bolt-on - or something that extends no further than donating generously to charity. In the new era of accountability to stakeholders, corporate social resonsibility policies have been thrust centre stage, said Chris Larson, rural development director, Business in the Community: “CSR now sits at the very heart of the way businesses relate to society. Globalisation and the internet have created a world in which there is no hiding place. “The scrutiny of NGOs and public activism exposes new areas of social responsibility and corporate blind spots. Supply chain relationships have not been associated with CSR. This is changing.”