European Market: Sustainability & CSR: What Is It All About?

In June 1992, at the Earth Summit in Rio de Janeiro, Brazil, more than 178 countries adopted Agenda 21, a comprehensive plan of action to build a global partnership for sustainable development to improve human lives and protect the environment. Using this as a basis, the United Nations worked with countries all over the world to identify objectives for a better future through sustainable development. In 2015, the Sustainable Development Goals (SDG’S) were finally adopted.

In the same period, the International Standards Organisation (ISO) was tasked with developing a set of tools that could be used by companies and organisations to measure their performance against what became known as ‘corporate social responsibility’ (commonly referred to as CSR). The resulting ISO 26000 Standard for Social Responsibility became the guiding light for CSR globally.

CSR is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. With this, a company can make sure that it is operating in a way that makes society and the environment better.

Today, in Europe we are faced with a situation in which CSR and sustainability dominate the discussions with retail buyers of fresh produce. Because they have influence over billions of consumers, retailers see it as their moral responsibility to be involved in sustainability all the way down the supply chain. Retailers also understand that if they can demonstrate a solid responsibility (and are prepared to be held accountable) for sustainability, it can provide a competitive edge in their marketing to the new generations of consumers who have a true passion for respecting and protecting the world.

It is often jokingly said that in Europe very soon there will only be two types of fresh produce suppliers: those that are bankrupt and those that are CSR-certified.

But here comes the crunch for fresh produce companies that want to supply European retailers: Retailers follow the premise that a supply chain is only as strong as its weakest link, including sustainability issues. Therefore, often one of the first questions that is asked of any prospective fresh produce supplier is this: Please explain what YOU are doing about sustainability on your farm or in your company? Many topics are raised, such as:

• Do you look after your workers properly?

• Are your corporate governance affairs in order?

• Do you act responsibly with scarce resources, such as water?

• (How) can you guarantee that your product is clean and safe for consumption?

With all this pressure, it is often jokingly said that in Europe very soon there will only be two types of fresh produce suppliers: those that are bankrupt and those that are CSR-certified.

COVID-19 has played a substantial role in bringing much more attention to CSR, and it follows that the pressure is piling up on companies to make their play regarding sustainability. In fact, EU legislators are currently looking at ways to make sustainability due diligence and reporting compulsory, so that companies cannot sidestep their responsibility anymore. Think I am joking? Read this excerpt from the European Parliamentary Research Service, published in October 2020.

The COVID-19 crisis has had a profoundly disturbing effect on global value chains. This creates new opportunities for strengthening human rights and environmental due diligence. The crisis has revealed the fragility of global supply chains. All this has had a severe effect on workers and local communities, particularly in developing countries, where many jobs have been lost. Such massive pressure on labour markets risks degrading labour standards and work safety even further. The crisis is therefore driving a deep restructuring of global supply chains that could provide a good opportunity to make them more sustainable.

In this regard, there are signals that the European Union is moving towards proposing a mandatory due diligence system for European businesses. It recently published a study that reveals that the voluntary approach is insufficient. The EU Commissioner for Justice Didier Reynders announced that the Commission had started consultations on the renewed sustainable finance strategy, which also included due diligence and could provide the main lines for a possible legislative initiative to make human rights and environmental due diligence in international supply chains mandatory for EU enterprises.

So, dear readers, the bottom line in terms of getting involved in sustainability is the following: Do you have a choice? NO! The next question that begs to be answered is: Does it add value to a fresh produce company? The answer is definitely YES!

Do you know the saying ‘If you do not know where you are going, any road will take you there’? Phrased differently: ‘If you do not know where you are going, you will end up somewhere else’. Especially in these times, this emphasises the need for a clear strategy in your sustainability and CSR endeavors. Haphazard and ad hoc approaches are something of the past.
Getting started on a journey of sustainability is not difficult. It requires commitment, the preparedness to collaborate with others in the supply chain, the ability to think creatively, and a clear-cut action plan. In my next column, I will illustrate how this can be achieved by following a ‘do it yourself’ 5-step approach.

Nic Jooste. owner of NJ Immersed, is a fresh produce marketing and CSR specialist based in Rotterdam, the Netherlands.

Originally printed in the February 2021 issue of Produce Business.