Today’s consumers demand transparency and accountability from the businesses they frequent, so establishing corporate social responsibility is important to running a sustainable operation.

As part of WATT Global Media’s 2020 Chicken Marketing Summit webinar series, Center for Food Integrity CEO Charlie Arnot, spoke about the concept of environmental, social and governance (ESG) and what it means to companies and consumers. He spoke on June 17, 2020, in the fifth of a series of seven webinars proudly sponsored by Zoetis. The webinar will be available to view on demand for free and free registration for future webinars is now open.

ESG explained

Environmental, social and governance can be considered the three central factors in measuring the sustainability and societal impact of a business. Recent research, he said, as well as the rising public opinion in business shows that ESG is increasingly important to the profitability and sustainability of a business.

In the past, ESG would have taken a backseat to financial goals, but now it is of equal importance, Arnot said.

Three steps to sustainability

In order to help food companies with this challenging issue, the Center for Food Integrity (CFI) developed a three-step program to establish best practices for sustainability.

The three-module program, which is available at optimizingsustainability.org, creates a framework to set sustainability priorities.

The three modules are:

  • Setting sustainability priorities: This module helps establish priorities based on values and stakeholder interests and creates a framework for explaining priorities or considering requests.
  • Evaluating sustainability tradeoffs: This module walks users through the process for evaluating the potential impact of change in practice or policy.
  • Responding to requests for commitment: This module teaches how to engage and respond to an organization asking for change.

Setting priorities

The first module is an eight-step program that asks companies to evaluate and prioritize what matters to it. It incorporates business objectives and company values. When complete, it demonstrates a company’s sustainability priorities and the rationale behind them.

The eight steps are:

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  • Establish sustainability leadership team
  • Identify business objectives and values
  • Identify stakeholders
  • Identify relevant sustainability attributes
  • Collect data and information
  • Analyze stakeholder concerns and identify priority issues
  • Evaluate potential tradeoffs between attributes
  • Finalize priorities and rationale

Evaluating tradeoffs

All decisions in life involve a consideration of the positives and negatives. The second phase of the process uses a four-step process to evaluate the possible impact of a new practice or policy on the operation.

The four steps are:

  • Identify non-negotiables based on values and priorities
  • Gather life cycle assessment and sustainability data
  • Summarize data to visualize impacts being evaluate
  • Evaluate the tradeoffs

The process uses a decision-making rubric assessing environmental, economic and social impacts of a practice or policy. Overall, the decision-making process can be used to help explain a company’s rationale, illustrate the potential impacts of a change under consideration and support decisions to change – or continue – practices or policies under scrutiny.

Responding to requests

In the sphere of animal agriculture and food production, both producers and customers are constantly dealing with pressure groups promoting a certain practice or demanding the cessation of another. The final phase of the process provides a decision tree and process to evaluate and respond to these campaigns.

The decision tree includes four actions:

  • Understand the issue
  • Evaluate the source
  • Ask if the change would align with the company’s current strategy
  • Plan an engagement and response strategy

Issues for further consideration

Arnot said change is the only constant when it comes to good ESG practices. For example, earlier in 2020 environmental impact was the chief issue, but now – with the global COVID-19 pandemic and widespread social unrest in the United States – the social role of a company in society is the chief issue.

Moreover, with greater potential for engagement and scrutiny via online channels, the pressure on companies is greater than ever and they must be ready to engage with both ordinary consumers and organized activists.

Careful consideration of both existing and new practices and policies is essential as is clear and transparent communication about policies and practices. Companies need to remember its about balancing all priorities rather than going all in on a single issue, but they must also be ready to support and defend their position when its challenged.