Corporate Social Responsibility in the Food Industry. Valuing the Use of Corporate Social Responsibility in the Australian Food Industry
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1 Corso di Laurea magistrale (ordinamento ex D.M. 270/2004) in Relazioni Internazionali Comparate Tesi di Laurea Corporate Social Responsibility in the Food Industry. Valuing the use of Corporate Social Responsibility in the Australian food industry. Relatore Ch. Prof. Giovanni Favero Correlatore Ch. Prof. Stefano Soriani Laureanda Lucrèce Bilinelli Matricola 840125 Anno Academico 2014/2015 2 Abstract: Since the last decade, there has been a growing interest in Corporate Social Responsibility (CSR) from stakeholders including customers and producers. The high exposure and reports of corporate abuse, thanks to the media’s far reach, has made consumers realize the impacts businesses have on society and on the world. Some multinational well known brands such as Shell, Nike or McDonald’s have already experienced the consequences of their unethical behaviour, leading to consumer discontent, boycotts, NGO reports, trials and increased media coverage of their actions. As our world becomes increasingly interconnected and globalized the social and environmental business challenges have grown as well as the public’s concern about society and business relationship; consequently consumers’ are acting out and challenging unethical businesses. This results in further external pressures from NGOs and governments regulations. The increased exposure of corporate abuse combined with stakeholders’ growing awareness of the importance of CSR has forced management teams to shift towards responsible corporate practices. As a result, having a pro social/environmental agenda is becoming more important for businesses. It seems that at this day and age, long-term profit maximisation is not the only success factor for businesses considering they are expected to fulfil their moral obligation to society. CSR is a broad concept. There is no consensus on a common definition, and the debate about CSR’s effectiveness in terms of reputation, financial performance and marketing capability goes on, as these assumptions have not been fully tested yet. It is therefore interesting to research this particularly recent subject of interest in the Australian market. According to the Australian Business purpose Study, Australians are highly apprehensive about corporate behaviour, ranking it as one of the top areas of concern amongst Australians1, surprisingly before homelessness and human right issues. Consequently, we expect to notice a high CSR activity in the Australian market. This research establishes an attempt at looking into CSR in order to understand if it can be a positive tool for an industry. In this paper, the general concept of CSR will be defined, and its application in the Australian market will be examined. Furthermore, the 1 H. Settineri, “Responsible businesses reap rewards”, Retail World, (2014), p.36 3 analyses of this research will focus on the roles CSR plays in the food industry, examining what CSR aspects each company focus on, (this includes charities, local community support, environmental efforts…), detailing examples of two Australian food companies that have shifted their approach towards CSR. The data gathered will be analysed to better understand the ways each company implements CSR in to their marketing display and their business profitability to illustrate the implications and values CSR has for some industries and to disentangle different aspects that are usually mixed together in advertising and in marketing studies (as organic production and fair trade, and so on). I will analyse companies supplying different products and different implementation of CSR in order to have an overall view of the Australian food industry. 4 Acknowledgements First of all, I would like to thank my godfather, who has always believed in me, and who has been my rock through my studies and working experience, even from Belgium, wherever in the world I would be. I am blessed to have him in my life. A special thanks goes to my boyfriend Samer for encouraging and motivating me during the writing of my thesis and for giving me precious insights on Australian food companies. Even from far away in Australia, his support and love have been invaluable. I would also like to express my gratitude to my supervisor, Prof. Giovanni Favero, for his advice, guidance and support through the realization of this thesis. This thesis is dedicated to my father, who instilled the value of education in me, and who would have been extremely proud to see me graduate. 5 Table of Contents GENERAL INTRODUCTION ............................................................................................................ 6 1. THEORETICAL OVERVIEW OF CORPORATE SOCIAL RESPONSIBILITY ...... 17 1.1 An Imprecise Concept ............................................................................................ 17 1.2 The Emergence of CSR in the 20th Century; a Brief History .............. 21 1. 3 CSR Core Principles ................................................................................................ 38 2. THE STATE OF CSR IN AUSTRALIA ................................................................................ 43 1.1 Focus Area: Environmental Sustainability ................................................. 44 1.2 Sustainability Reporting and Useful Frameworks in Australia ....... 49 1.3 « Giving is Caring » ................................................................................................... 54 3. FOOD INDUSTRY CHALLENGES AND CSR RELEVANCE ....................................... 61 3.1 Supply Chain Problems ......................................................................................... 61 3.1.1 Retailers Power Abuse ........................................................................ 63 3.1.2 Food Safety ................................................................................................. 66 3.1.3 Social Issues .............................................................................................. 69 3.2 Societal Concerns; A Challenge for Food Companies ............................. 73 3.3 Environmental Impact of Food Production ................................................ 82 4. AUSTRALIAN FOOD COMPANIES: CASE STUDIES .................................................. 87 4.1 Lion Australia ............................................................................................................. 87 4.1.1. Economic Responsibility ................................................................... 89 4.1.2. Environmental Responsibility ....................................................... 92 4.1.3 Social Responsibility .......................................................................... 103 4.2 Tassal ............................................................................................................................ 116 4.2.1 Economic Responsibility .................................................................. 118 4.2.2 Environmental Responsibility....................................................... 120 4.2.3 Social Responsibility .......................................................................... 127 Reports Conclusion ....................................................................................................... 132 GENERAL CONCLUSION.............................................................................................................. 136 REFERENCES ................................................................................................................................... 138 6 GENERAL INTRODUCTION Corporate Social Responsibility (CSR) has become a very topical issue in contemporary time. The literature on this subject is quite recent and saw its peak in the 1990s and 2000s mainly with contributions from the United States. However, already six decades ago, Howard Bowen, an American economist and the « father of Corporate Social Responsibility2 », published in 1953 his ‘Social Responsibilities of the Businessman’. From Bowen’s contribution, over the past sixty years, the literature on this subject has been controversial with many disagreements between scholars. « For a subject that has been studied for so long, it is unusual to discover that researchers still do not share a common definition or set of core principles (…) or even wether firms should have social responsibilities in the first place3». CSR remains contestable. Even if CSR is widely discussed for its definitions, principles and effects (if positive at all) it has on businesses, it is undeniable that it has become a matter of high importance and it has induced discussions about the role of companies in the society. There is an ample evidence of this importance as CSR is now top priority for many worldwide corporations in very different sectors that are trying to minimise their impact on society, in an initiative of their own or pressured by governments, Non Governmental Organisations (NGOs) and other stakeholders. These industries include the automotive industry, with brands such as Mitsubishi and Ford, the petroleum industry (highly under NGOs pressures), the spirit industry (for instance, Bacardi and its sharp focus on sustainability with its CSR report “our spirit is clear”), the fashion industry (C&A and its current logo “today’s look is sustainable” or H&M and its new “Conscious Exclusive”), the financial sector (Citigroup’s 50 billion investment to reduce their carbon footprint), the high tech society (Nokia and its green phones), and the food industry (Nestlé or Coca Cola and its alliance with World