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[This is a working paper from the project “Sustainable consumption and production and political economy in the UK food service sector”. Please do not quote without permission of the author]

Daniel Welch, Sustainable Consumption institute, University of Manchester [email protected]

Corporate ownership and the provision of sustainable consumption: political economy and sustainability in the UK Food Service Sector

Introduction This paper arises from a project that set out to examine the relationships between political economy and sustainability in the UK food services sector (comprising of restaurants, cafés, hotels, catering companies etc.). A brief overview of the political economy of the sector is provided in an Appendix. A focus of the project was to examine the effect of Private Equity investments in the sector, and a comparative case study was conducted of the sustainability engagements of two of the largest company groups in the sector: one a shareholder-owned publicly listed company, the other formerly owned by one of the world’s largest private equity groups. The paper proceeds by first addressing corporate sustainability in the sector and its relation to public and private equity ownership. I go on to argue that differences in corporate engagement with sustainability attributable to these corporate ownership forms have eroded with the development of corporate sustainability, closely allied to the sustainable development agenda. I argue we can usefully address the latter phenomena through the concepts of “metrological project” (Latour 1987; Mitchell 2008) and “economic imaginary” (Sum and Jessop 2013). I conclude by reflecting on the prospects for transitions towards genuine sustainability offered by sustainable development, and argue that a more profound transformation of economic institutions is required.

Corporate Sustainability in the Foodservice Sector Two initiatives index engagement specific to the sector. In 2010 trade association the British Hospitality Association’s five-year strategic plan saw “Sustainability at the heart of strategy” touted as one of nine strategic commitments (BHA 2011)1. In the same year the Global Reporting Initiative, a voluntary international standards-setting initiative for corporate sustainability reporting (aligned with the UN Global Compact), published a dedicated ‘Sector Supplement’2, demonstrating specification of reporting standards.

WRAP (Waste and Resources Action Programme) has played an important galvanising role for sector engagement with waste reduction.3 Subsector specific initiatives include the Sustainable Restaurant Association, which runs an accreditation scheme and works with both independents and company groups (such as Whitbread) and the Soil Association’s ‘Food For Life Catering Mark’ accreditation

1 Notably, these concerns had been crowded out of the BHA’s 2017 report, overtaken by more pressing issues of Brexit. 2 ‘GRI Food Processing Sector Supplement’ (which covers the foodservice sector, including food commodity trading) 3 On the role of WRAP in galvanising the discourse coalition around food waste in the retail sector see Welch, Evans and Swaffield (forthcoming) and Evans, Welch and Swaffield, 2017. 2

scheme.4 Cross cutting the sector and its supply chains are of course the major voluntary transnational certification schemes (e.g. Fairtrade, MSC, Rainforest Alliance, RSPO) operating in numerous value chains with some (e.g. organic) partially integrated with global food governance (Codex Alimentarius) and EU and national legal standards.

Engagement in corporate sustainability is generally indexed by sustainability reporting. While reporting is often dismissed as a PR exercise or greenwash, what these criticisms fail to acknowledge is that such engagement with metrics-based company reporting (especially when integrating standards such as the GRI) requires the institution of a range of organisational practices—specialised sets of auditing and monitoring procedures necessary to provide the range of data, figures and targets required for sustainability reporting. This “calculative infrastructure” can have performative effects (Gond and Giamporcaro, 2016). As consultancy AccountAbility note (Forstater, et al., 2006: 11): “...some evidence suggests that the process of building a public report is the single most important driver of change in how things to be reported are managed, since it increases organisational knowledge, enables reflection and catalyses policies and practices”.

The adoption of metrics-based sustainability is often largely a function of scale, albeit strongly conditioned by sector, with both non-regulatory and regulatory drivers (such as carbon emissions reporting, e.g. UK Climate Change Act 2008). Most recently the EU Directive on non-financial disclosurehas come into force, applying to 6000 EU companies with over 500 employees (European Commission, 2013), and been incorporated into UK law.5 The legislation requires reporting on environmental, social and employee-related, human rights, anti-corruption, diversity and bribery matters, as well as on the company’s business model and risks associated with these areas. It is expected that the first company reports will be published in 2018 covering financial year 2017-2018. The EU directive encourages organisations to report against well-established and recognised frameworks such as the Global Reporting Initiative’s Sustainability Reporting Guidelines and the UN Global Compact.

The top 10 company groups in the Foodservice Sector by sales6 all engaged in corporate sustainability reporting and associated practices, albeit to materially differing degrees (company web sites, http://database.globalreporting.org, 2018).

Two examples of corporate sustainability processes in the sector Whitbread Plc

Whitbread Plc is the UK’s largest hospitality group and the third largest foodservice group by sales, owning mass market food service brands including the UK’s largest coffee shop chain Costa Coffee,

4 Currently, the Catering Mark accredits more than 180m meals a year, including the catering in over 25% of schools in England, staff canteens and companies such as Pearson and Jaguar/Land Rover as well as institutions including Defra, the Greater London Authority, the Scottish Government and the National Assembly of Wales. http://www.sacert.org/catering

5 Companies, Partnerships and Groups (Accounts and Non-financial Reporting) Regulation No. 1245. http://www.legislation.gov.uk/uksi/2016/1245/pdfs/uksi_20161245_en.pdf

6 McDonalds, Mitchells & Brewer, Compass, Whitbread, YUM! Brands, Greggs, SSP, Green King/Spirit, Starbucks, Restaurant Group, Domino Pizza. 3

largest hotel chain Premier Inns, and restaurant brands Beefeater, Brewers Fayre and Table Table, with over 4,700 outlets, including 650 restaurants and over 2,200 coffee shops and around a 50,000 strong UK workforce (Whitbread 2017). Whitbread had a 6.3% share of the foodservice market in 2016 (Euromonitor 2017). Costa Coffee, the company’s largest brand in the sector was the fourth largest UK chain by outlets in 2016 (2,121). As a PLC, as of 2017, the company was 5% owned by Blackrock, the world’s biggest Private Equity firm (down from 10% in 2015 [ECRA 2015]), with about 15% owned between three further fund managers (Whitbread 2017).

Whitbread’s first major commitment with the sustainability agenda began in 2006 with engagement with the Carbon Trust to develop a “low carbon business vision”, establish base line emissions data to institute a long term programme of emission reductions (26% by 2020) and engage in investment in green technologies (Carbon Trust 2010). This was followed by a dedicated 2008/2009 Environment Report and in 2009 all of Whitbread's UK operations were certified under the Carbon Trust's Carbon Reduction Standard (Carbon Trust 2010).

Following a large-scale staff survey on attitudes to the environment, in 2009 the company convened a multi-stakeholder “debate on the future of sustainable hospitality”, including industry representatives the BHA, consultancies and NGOs and third sector organisations —e.g. Business in the Community, the Carbon Trust, Soil Association, the Fairtrade Foundation, and WWF. The company’s official account of this event noted that the hospitality sector had “to date done little to demonstrate meaningful solutions to these challenges” (Whitbread 2010).

Both internally and externally the case of increasing engagement in the sustainability agenda was made around employee engagement, consumer expectations, expectations of major investors and both the strategic opportunities and civic duty of “leadership” in “sustainable hospitality”, framed in terms of leading the sector in reducing CO2 emissions and social and environmental supply chain auditing.

“Raising consumer awareness of climate change and how consumers, through simple behaviour change, can support the move to a low carbon economy is a major opportunity for the sector.” (Whitbread 2010, p. 6)

“Educating employees is vital…the cultural benefits of fostering a sense of shared involvement and responsibility in the community can help improve morale, cohesion and, ultimately, staff retention.” (ibid)

““Do our consumers really care? Our research was compelling. Our guests wanted the businesses they were engaging with and the brands they were using to take it very seriously and to start to do something about it…We are trying to do the right things for the planet, for the local communities in which we operate and also commercially. All of this ultimately gives us competitive advantage.” (Anderson, Whitbread)

“The biggest challenge is how do we roll out the best examples of sustainability from the leaders to the followers. Hospitality and leisure accounts for our third largest area of consumption after the home and after transport. So this is another reason why this industry is important and why leadership within it is important.” (Burbridge, Carbon Trust) 4

The 2009 event was used as the catalyst to launch a major corporate sustainability programme (‘Good Together’). Activities focused around: reducing CO2 emissions, waste and water use (including innovation in technology in its building stock); sustainability accreditation and monitoring in tea, coffee, timber, palm oil, fish, and meat supply chains; philanthropic and development activities; employee training; and menu development (nutritional profile). The programme included the full panoply of reporting metrics and the extensive supporting practices of monitoring and measuring in environmental management systems (e.g. BREAMM standards) and in supply chain auditing. The programme also involved ongoing engagement with a range of external organisations such as the Sustainable Restaurant Association, the Green Building Council and reporting assurance auditors Corporate Citizenship and sectoral engagements and initiatives such as the Hotel Carbon Measurement Initiative and the Hospitality Sector Carbon Reduction Forum.

The programme was widely recognised as ambitious at the time, with external recognition by independent rating agencies. For example, the Ethical Consumer Research Association awarded the company Best Rating for Environmental Reporting and Supply Chain Management in 2011 according to its exacting standards (ECRA 2011). The FTSE4Good ethical investment stock market indices’ independent benchmarking agency EIRIS rated Whitbread in the top eight of the international ‘Travel & Leisure’ sector (FTSE 2013) (the rating indicates sector-relative success at managing company-specific ‘Environmental, Social and Governance’ risks).

Five years into the programme Whitbread could report meeting and exceeding a number of significant targets, such reducing carbon emissions 32.8% and diverting 23,000 tonnes from landfill, as well as best practice at embedding sustainability indicators and practices into general corporate governance processes (Whitbread 2014). Whitbread maintained its leadership in the sector. Of 42 restaurant chains surveyed in 2015 by the Ethical Consumer Research Association only the three owned by Whitbread had anything other than “Worst Rating” for Environmental Reporting, and only the two chains owned by Casual Dining Group anything other than the “Worst Rating” for ‘Supply Chain Management’, the other key index of engagement in corporate sustainability (ECRA 2015).7

While certainly both sector-leading and pursuing best practice in certain fields of activity, Whitbread was not unusual amongst major UK multinational companies in launching an integrated, CEO-led sustainability initiative at this point in time. These core institutional processes occurred in the context of an intense focus in the public sphere on sustainability issues, as evidenced by media coverage of climate change. There was a major upswing in media reporting on climate change in the UK from mid-2005, peaking in early 2007 and late 2009; driven by, firstly, the IPCC Fourth Assessment Report and Al Gore's documentary ‘An Inconvenient Truth’ and secondly activity leading up to the UK Climate Change Act and Copenhagen COP summit (Boykoff et al, 2018). As Wehmeier and Schultz (2010: 13) suggest: “What triggers institutionalization processes [of corporate social responsibility] within organizations is the interaction of external conditions, negotiated definitions of problems and mutual constructions of expectations between corporations and other organizations”.

Whitbread inaugurated a new sustainability strategy in 2017. Again following best practice the company “conducted an in-depth materiality assessment” (of issues “material” in the technical

7 The ultimate holding company of Casual Dining Group (with around 300 restaurants, including Café Rouge & Bella Italia), is PE firm Apollo Global Management. As of 2017 a further exception for environmental reporting was the Prezzo chain, due to engagement of its Private Equity owner TPG Capital. 5

sense to company reporting) consisting of stakeholder engagement (“ senior business leaders, external partners, NGO’s and customers”) and an “externally commissioned social and environmental meta-trends review” (Whitbread 2017). Notable here are the alignment of “material issues” with both Global Reporting Initiative standards and with the UN Sustainable Development Goals (which alignment the GRI has been militating for).

Certain horizons or limits to corporate engagement with sustainability issues were arguably also demonstrated by Whitbread in 2017, when in September the company quit the multi-stakeholder Ethical Trading Initiative (a UK-based labour standards and social auditing organisation), to which it had signed up 18 months before, over a dispute with Unite the Union over recognition of workers at Premier Inns. Whitbread argued that the ETI’s code on freedom of association (generally applied to workers in overseas supply chains) did not apply to its direct employees in the UK. Unite claim that the company’s commitments and obligations on freedom of association and collective bargaining “are not currently being met in any practical sense” (The Guardian 2017). This dispute occurs in a low wage service sector characterised by casualisation, low wages and low union density (the accommodation and foodservice sector has the lowest union density in the UK, 2.5% in 2016, against 23.5% for all employees (D of BE&IS, 2016)). The National Living Wage introduced an upward step change to the cost structures of restaurants and hotels in 2016, with further annual increases of c.6% expected until 2020, according to PWC (2017), suggesting a context in which Whitbread senior management are unlikely to encourage processes encouraging collective bargaining.

While clearly there is nothing inevitable about the outcome of this dispute, it usefully demonstrates potential limits to the engagements of corporations beholden to a fiduciary commitment to shareholder value.

SSP Group

SSP Group is a British headquartered multinational, one of the largest operators of food and beverage travel concessions globally, and the sixth largest UK foodservice group (Horizons 2015). It was acquired by private equity firm EQT in 2006 for £1.822 billion, following a management buyout from Compass Group8 and was re-floated as a Public Limited Company in 2014, with EQT making a final divestment in 2015. EQT was ranked 26th globally amongst private equity (PE) funds in 2014, the year of the SSP’s stock market floatation, raising $8.2bn in capital since 2009 (PEI 2014). SSP’s corporate sustainability initiative was developed during its ownership by EQT.

Since December 2010 EQT was a signatory to the United Nations-supported Principles for Responsible Investment and adopted a policy that covers responsible investment (RI) practices both for EQT as an investor as well as for portfolio companies, with a dedicated RI team engaging portfolio companies on “Environmental, Social and Governance’ issues. EQT led the engagement with corporate sustainable at SSP, which at stock floatation in 2014 embraced the full panoply of environmental reporting, supply chain auditing and responsible sourcing policies.

8 Compass Group, the UK’s second largest food service group, had in origins in 1941 in Factory Canteens Ltd, formed as Compass in 1987 and floated as a PLC in 1988. Its subsidiary Select Service Partners (SSP) delisted through a management buyout in 2006.

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EQT’s engagement with the responsible investing and corporate sustainability agenda was unusual amongst PE firms at this time. This was a period in which private equity funds were pilloried for tax avoidance, excessive leverage, asset stripping, “planned bankruptcy”, systemic tax avoidance and damaging working conditions (Ethical Corporation 2007; FSA 2006; Evans and Habbard 2008; Folkman et al. 2009; Froud and Williams 2007; GMB 2007; IUF 2007; Montgomerie et al 2008; Watt 2008).

As De Cock and Nyberg (2014) note Private Equity suffered a major legitimation crisis in 2007. With intense media coverage “for a brief moment it became the ‘face’ of 21st century capitalism” and PE executives were forced to testify in the UK Parliament as part of the Treasury Select Committee Inquiry into Private Equity, an event that was described in the press as ‘The Trial of Private Equity’ (FT 20/06/07) (Cf. Montgomerie et al 2008). Concerns as to the debilitating impacts of excessively leveraged private equity buyouts on companies, workers and unions (e.g. asset stripping and working conditions) and heightened systemic risk in the financial system, as well as tax losses through ‘inversion’, were reflected in the 2013 EU AIFM Directive, the first direct regulation OF Private Equity (despite significant amendments reducing the regulatory framework).9 Subsequently we might note the controversy, in which PE served metonymically for financialised corporate capitalism as whole, was subsumed into the wider crisis.

De Cock and Nyberg (2014) argue that lack of “transparency” emerged as a key challenge and that the PE industry resolved its legitimacy crisis through the issue of transparency. I would argue that EQT’s (and SSP’s) engagement with the corporate sustainability agenda must be seen in this context. Corporate sustainability acts as an index of legitimate corporate citizenship, with “transparency” operating as a master frame (see Hansen, et al 2015). Engagement with corporate sustainability can be seen as a critical response of PE actors to this legitimation crisis. More prosaically, Crifo et al (2013) stress the trend for PE firms to differentiate themselves in order to attract capital and recycle funds into new investment opportunities. “Environmental, Social and Governance” engagement, as the sector styles it, provides one means to do this—at least until it is fully normalised in the market (at which point novel developments in ESG engagement may come to serve as differentiators).

Subsequent developments have seen the PE sector moving towards maturity in its engagement with ESG, responsible investing and corporate sustainability of portfolio companies. According to PWC, in 2013 50% and in 2016 58% of PE houses regularly included ESG issues in the 100 or 180-day transformational plan, immediately following acquisition; PE houses with responsible investment policies have risen from 55% (2013) to 68% (2016) (PWC 2016). According to PwC, PE houses are responding to demand from investors to address greater societal concern about ESG factors, and to evidence that active ESG management can deliver investment value. ESG is primarily framed in terms of “risk management”. Increasingly, however, PwC reports PE and investors are aligned in appreciating the business rationale for adopting ESG management principles (PWC 2016). Empirical research in the French market by Crifo et al (2013) confirms institutional investors as a primary driver of ESG engagement.

9 Critically, as it is inherent to the PE model (rather than more predatory practices) increasing the debt structure of a company can also reduce its tax liabilities. In this context some commentators have called PE ‘taxpayer financed capitalism’. (http://rooseveltinstitute.org/how-does-private- equity-really-make-money) 7

There is no simple story to tell regarding the relation between engagement in corporate sustainability practices and PE in the foodservice sector—the days when PE could be pilloried for lack of engagement and contrasted unfavourably to Public Limited Companies have largely gone.10 Notably, aside from Whitbread, amongst major restaurant chains the only serious policy engagements with corporate sustainability come from PE ownership (Apollo Global Management and TPG Capital) (—websearches, CorporateCritic.org database).

If structures of corporate ownership condition engagement in sustainability in the foodservice sector we should not primarily at the level of the distinction between Private Equity ownership and publicly listed companies but at the horizon of the model of the corporation itself, of “shareholder value” (Aglietta 2000) and financialisation more generally.

How should we understand corporate sustainability? How should we evaluate the potential for corporate sustainability initiatives in the sector to contribute towards to transitions towards sustainability in the global food system, if we can move beyond specific cases of ameliorative, or even restorative, activity in global value chains (Gereffi, 1994)?

Critical literature on corporate sustainability, or Corporate Social Responsibility, variously addresses the phenomenon as a PR exercise (e.g. Deegan, 2002; Starkey and Crane, 2003), or from an ideological perspective (e.g. Banerjee, 2003, 2008; Jones , 1996): as a defensive ideological response to reputational challenges (e.g. Falkner 2003); a hegemonic response intended to set a limit to discourse on reform (Benson and Kirsch 2010); or a co-optation of critique (e.g. Crane, 2000; Fleming, 2010).11

Without wanting to reject the notion of corporate sustainability performing ideological functions tout court this literature tends to posit a singular CSR as a phenomenon operating at the behest of the world historical logic of capital. Firstly, it is therefore poor at disaggregating the phenomena into variegated system of provision and industry sectors. It seems highly doubtful that CSR in the extractive industries exhibits the same dynamics in relation to potential sustainability transitions as CSR in the foodservice sector, for example. Amongst other differences, one could explore how dynamics of consumption play out quite differently in relation to corporate sustainability in the

10 Qualitative research into the PE and PLC boards of large companies suggests that PE boards report almost complete alignment in objectives between executive (i.e. senior management) and non-executive directors, focus on single-minded value creation, and receive information that is primarily cash-focused. PLC boards by contrast report lack of complete alignment between executive and non-executive directors and focus on management of broader stakeholder interests (Acharya et al 2008).

11 Gond and Matten (2007) provide a useful overview of the literature, pointing to more constructive approaches which approach CSR as a discursive, cultural product (e.g. Aguilera et al., 2007; Matten and Moon, 2008; Swanson, 1999), or from a practice or performative perspective (e.g. Mitnick, 2000; Rowley and Berman, 2000). Neo-institutionalist work on CSR (e.g. Lammers, 2003; Lammers and Barbour, 2006; Schultz and Wehmeier, 2010), which Gond and Matten (2007) do not address, can also be brought into dialogue with a practice approach. 8

economic circuits of these different sectors (for example through social movements and organised consumer activity). Secondly, such approaches are equally poor at recognising wherein lies the commonality of the practices that form the “calculative infrastructure” (Gond and Giamporcaro, 2016) of corporate sustainability—corporate sustainability’s “metrological project” (Latour 1987, Mitchell 2008) of environmental management systems, supply chain auditing, reporting metrics and standards.

This “calculative infrastructure” of corporate sustainability initiatives—of environmental management systems, supply chain auditing, reporting metrics and standards etc.—is partially integrated into: formal economic activities (such as carbon trading, UN-REDD Programme); legal frameworks (e.g. UK Climate Change Act, UK Modern Slavery Act, EU Directive on non-financial disclosure, US Conflict Minerals Trade Act); and much ‘soft regulation’ or governance at varying scales, such as the UN Global Compact and transnational private governance (e.g. certification schemes, Global Reporting Initiative).

I want to make a general case for understanding corporate sustainability as a “metrological project” that bears a complex relation to sustainability, or sustainable development, understood as an “economic imaginary” (Chiapello and Fairclough, 2002; Sum and Jessop, 2013; Taylor 2002; cf. Jasanoff and Kim 2015), and the potential role of both metrology and imaginary in processes of sustainability transition. My argument is that far from simply rhetorical, this new economic imaginary has substantive, if nascent, basis in the metrological project or calculative infrastructure of corporate sustainability metrics – here the imaginary is operationalised and institutionalised.

By metrological project here, following Latour (1987), I mean a project of measurement with potentially performative effects. As Mitchell puts it:

“Metrologies create and stabilize objects…the economy is a very large instance of such an object, with rival attempts to define it and to design tools for its measurement and calculation.” (Mitchell 2008)

Both “the economy” and “the environment” (though not nature) can be understood as large-scale metrological projects. It is important to note here that “the environment” qua metrological project is not nature. Below I suggest the metrological project has little to do with actual ecological limits (see Bjørn et al., 2016).

The general acceptability of quantification and calculated ratings as a ‘technology of government’ (Miller & Rose, 1991) has undoubtedly enabled the development and acceptance of the corporate sustainability metrological project. Gond and Giamporcaro (2016,p. 37) argue a similar case in the context of the development of the French ‘Socially Responsible Investment’ (SRI) market. Here, pioneering “calculative” SRI agencies, engaged in developing and applying the metrics of SRI, “were systematically seen by macro actors such as labour unions, state-owned banks, or public pension funds as crucial ‘sites of power’ to be controlled to shape the market” for their own ends, and thus those macro actors helps materialise the novel metrology (ibid.).

It is useful here to turn briefly to the literature on “food regimes”. Food regime theory focuses upon the dynamics and agents of change in capitalist food systems. Following Friedman and McMichael (1989) foundational article this literature sought to focus on how patterns of circulation of food 9

reflect global power arrangements constituted by forms of capital accumulation and draw ‘links between international relations of food production and consumption to distinct periods or regimes of capitalist accumulation’ (ibid 95),

Friedman and McMichael identified a first regime (1870-1914) during the period of British hegemony in the world economy, and a second (1945-1973) under US hegemony in the postwar world economy.

Friedmann characterises the mid-20C “mercantile-industrial food regime” thus:

“implicit rules evolved through practical experiences and negotiations among states, ministries, corporations, farm lobbies, consumer lobbies and others, in response to immediate problems of production, distribution and trade. Out of this web of practices emerged a stable pattern of production and power that lasted for two and half decades.” (2005 p. 142)—

The regime is thus a period of relatively stable sets of relationships - the outcome of struggles among contending social groups - with unstable periods in between in which political contests over shape future developments.

There is controversy in the literature around how to characterise the current period and over the level of integration or instability of the current corporate-dominated global food system. McMichael (2005, p. 286) characterises a contemporary “corporate food regime”, the trajectory of which is constituted through resistances: both defensive (e.g. towards environmentalism) and proactive. Friedmann identifies the current situation as the “Corporate-Environmental” food regime (2005, 229) “based on selective appropriation of demands by environmental movements” not yet a fully hegemonic regime …like previous regimes “a specific constellation” of actors, implicit rules, regulations, beliefs and norms “that allow for renewed accumulation of capital” (2005, 228). However, the “emerging corporate environmental food regime is already contested by the very movements it draws on’ to ‘green’ itself (to the extent that it does), with such movements themselves ‘regrouping’…”

A defining characteristic of this “Corporate-Environmental” food regime “consists of two differentiated ways of organizing food supply chains, roughly corresponding to increasingly transnational classes of rich and poor consumers” (E.g. Walmart and Whole Foods Market). We could add to this the more recent engagements of retailers and foodservice groups around food waste (Welch et al 2018).

To return then to my central concern, corporate sustainability initiatives are therefore central to the corporate-environmental food regime. The more optimistic take on the corporate-environmental food regime is how it opens up spaces for contestation precisely around the quantification and measurement of environmental and social impacts in supply chains – a “politics of cultural legitimacy” (Campbell 2009) in which social movements find a voice. Campbell sees this as a “powerfully emergent new kind of hybrid governance structure (operating as a negotiated compromise between private sector and social movements)” (2009, p. 316) increasingly gaining hold of agricultural supply chains into Europe: an emergent “Food from Somewhere” regime is challenging the corporate “Food from Nowhere” regime. 10

For Campbell, carbon footprinting and other indicators in the new audit culture offer an adaptive response to negative ecological feedbacks that can link to reflexive consumption:

“The powerful audit cultures of the corporate environmental regime; the new language of measurement of food safety and environmental performance; the definition of quality to include ecological variables; and the cultural re-valorising of taste, localness, history and safety as branded, profit-generating drivers of new investment, can all be argued to have created information flows and feedbacks between consumers and distant ecologies.” (Campbell 2009, p. 316)

A neo-Polanyian approach, such as that pursued by Mark Harvey (see Harvey, 2014, 2015; Harvey and Geras 2018), to which I am sympathetic, would however be highly critical of the appeal of the food regimes literature to a “generic” capitalism above and beyond the socio-economic variation of specific political economies. The food regimes literature developed from the Regulationist School of political economy, concerned with long-term transformations of social relations and political economy, through periods of relative stability punctuated by crisis and reconfiguration. Régulation, here can be translated as ‘normalisation’ or ‘regularisation’. They approach these processes through two central concepts, "regime of accumulation” and "mode of regulation". Accumulation regime refers to the way in which configurations of production, distribution, exchange and consumption become stabilized into dominant form that organizes capital accumulation. The mass production, bureaucratic corporation, mass consumption and social welfare model of Fordism is the most widely understood example. The mode of regulation is the institutionalised order that stabilises and normalises this regime of accumulation—the practices (laws and regulations, working practices, modes of provision, forms of consumption) that provide its social context of reproduction. Tensions and disjunctions between the two are the source of crises (as in Marx’s contradictions of capital) that may lead to adaptations within the central configurations or to transformational reconfigurations, as in the crisis of Fordism and the emergence of a post-Fordist, or neoliberal, socio- economic order. The initial impulse of the food regimes literature was therefore to discover regimes of accumulation specific to globalised capitalist food production.

The neo-Polanyian critique of such an approach would be to question the characterisation of a global regime of accumulation above and beyond specific political economies—however much capitalist socioeconomic forms are central to those political economies. Harvey, by contrast, argues for analyses of specific geopolitical dynamics in global food production, such as that emerging between Brazil and China (Harvey 2014), which must account for the specificities of very different political economies, and the contrasting environmental endowments of land, water, solar and fossil energy in which those economies are found.

This caveat aside, Campbell’s account of a “Corporate-Environmental” food regime, understood as specifically grounded in particular political economies, namely the EU and North American, rather than as instantiations of a global regime of accumulation, can be understood in neo-Polanyian terms as arising from a co-evolutionary dynamic between economic organization, legal frameworks, expert knowledges and private transnational governance. 11

Sustainable Development as “economic imaginary” I understand “imaginary” here as the more or less coherent semiotic moment of the network of social practices in a given social field or social formation (Sum and Jessop 2013). Further, as Chiapello and Fairclough note:

“Discourses include imaginaries—representations of how things might or could or should be … These imaginaries may be enacted as actual (networks of) practices—imagined activities, subjects, social relations, etc. can become real activities, subjects and social relations, etc.— such enactments include materialisations of discourses..” (Chiapello and Fairclough, 2002: 195)

Changing economic imaginaries may reconfigure economic practice and institutions. Economic imaginaries inform collective calculation about the world, frame actors relation to their environment, decision-making and strategic action (Sum and Jessop 2013). Economic imaginaries in capitalist society ignore the full gamut of substantive economic activities to focus on formal economic activities (in Polanyian terms) and thus, argue Sum and Jessop “identify, privilege and seek to stabilize some economic activities from the totality of economic relations and transform them into objects of observation, calculation and governance” (ibid. p.165). I would argue however that in the case of sustainability as an imaginary there are both examples of redrawing the boundaries of formal economic activities (e.g. in carbon markets) as well as other instances within the metrological project where the objects of quantification are not directly commodified and remain outside market mediation (as in corporate sustainability reporting).

Whitbread Plc’s most recent engagements, with its integration of its reporting programme with the Global Reporting Initiative (GRI) and Sustainable Development Goals (SDGs), exemplifies the two aspects respectively. With the GRI and its project’s integration with the SDGs we see an expanding metrological project which exhibits the complex interaction between economic and political modes of instituting economic processes (Harvey & Pilgrim 2012). At the same time, the incorporation of metrics and processes in corporate sustainability relating to the SDGs exemplifies how corporate sustainability is becoming integrated to a wider imaginary of Sustainable Development encompassing multi-scalar processes of global governance.

The work of the Business and Sustainable Development Commission launched in Davos in 2016 is exemplary here. The BSDC (2016) “aims to map the economic prize that could be available to business if the UN Sustainable Development Goals are achieved”. The BSDC’s inaugural report Better World Better Business report is framed explicitly in the context of a legitimation crisis of global capitalism and unprecedented challenges to globalization and popular opposition to the economic status quo: “at the core of our argument is also the need for business to regain the licence to operate. We anticipate much greater pressure on business to prove itself a responsible social actor” (p. 7)

It begins:

“2016 has unsettled business leaders everywhere. Whatever one's political views, uncertainty and the return to a much more nationalist politics in many countries have displaced the assumption of steady global integration. … In the West, stagnant incomes 12

among broad groups made them angry at elites who were bailed out after the global financial crisis.” (p.6)

The BSDC explicitly sets out its stall as offering a new “economic model which is not only low-carbon and environmentally sustainable, but also turns poverty, inequality and lack of financial access into new market opportunities for smart, progressive, profit-oriented companies” (p.7). The report argues that the SDGs “could open 60 market “hot spots” worth an estimated US$12 trillion by 2030 in business savings and revenue” in four “economic systems” ( Food & Agriculture, Cities, Energy & Materials, Health & Well-being). The three most valuable ‘hot spots’ in Food & Agriculture are “Reducing food waste in value chain”; “Forest ecosystem services”; “Low-income food markets” and further hotspots are based largely in technical innovation, but include “Dietary switch” and “Restoring degraded land” (p.28-29).

This is “a new, socially focused business model that reaches parts of the global economy previously left largely to public aid” (ibid.). Its business case rests on efficiency gains and innovation, but crucially also legitimacy (“licence to operate”) and opening up new frontiers of commodification. The most innovative areas of commodification in ‘Forest ecosystem services’ are premised on carbon pricing and – explicitly - the development of mechanisms to price externalities (GHG emissions, water, ecosystem services). The report notes that the “effects of pricing externalities properly is most striking in the food system" (p.36)—“real” pricing of carbon, water and food adds almost 40% to the value of top market opportunities by 2030.

We can identify four shifts in the construals of “the economy” in this economic imaginary with potentially performative effects (see Sum and Jessop, 2013).12

• Shift from treating the macroeconomic mainly in national terms to multiscalar model including the global market

• Expansion of the economic to include factors previously considered economically irrelevant (in my case note externalities – they’ll mean something different)

• Widening of the ‘extra-economic” considered economically relevant

• A reconfiguration of the relation of the economic to ‘the environment’ as a field of calculability and measurement

The economic imaginary of sustainable development is largely an elite discourse. A critical issue raised for sustainable consumption then is how imaginaries are differentially integrated into the different moments of instituted economic processes of production, distribution, exchange and consumption. For the production of sustainable consumption does an economic imaginary need to be invested in moments of consumption? Or can sustainable consumption be achieved in any real sense, as it were, behind the backs of consumers?

12 The first 3 reflect similar shifts noted by Sum and Jessop (2013 p. 280) in the context of the imaginary of the “knowledge based economy”, the fourth is novel and specific to sustainable development. 13

Conclusion Imaginaries can function as a political force that can either enable or disable thoroughgoing social transformation (Jasanoff and Kim, 2015). The critical question is whether the incremental quantitative advances of sustainable development offer latent possibilities of more profound qualitative reconfiguration.

Such regimes of measurement and calculation, as Barry (2002, p. 268) argues, “can have the effect of disrupting the frame of politics, and creating a conduit for the cross-contamination of the economic and the political”. Barry uses the example of a mechanic performing a standardised test for exhaust fumes as part of routine vehicle licensing. He argues this has “the effect of translating a particular framing of a political debate [e.g. about pollution] into the economic field… In this way, politics and the market are connected to each other, but political confrontation does not come to interfere with market transactions,” as the politics of pollution have been resolved—at least as far as the car licensing regulation is concerned—elsewhere. At least that is until the metrological regime is disrupted by politics, as we have witnessed with the recent scandals over diesel emissions, opening the whole regime up to political contestation. Indeed Barry (2002) cites exactly the complications of assessing urban air pollution and car exhaust performance—even without systemic fraud—as an example of the “fragility of metrological regimes”. “Measurement and calculation do not only have anti-political effects,” he argues, echoing Campbell’s account of the emancipatory possibilities inherent in the corporate-environmental food regime, they also, at the same time “provide the basis for an opening up of new objects and sites of disagreement” (p. 274).

I suggest however caution with a more positive view of the prospects for such an interstitial politics in the context of ecological crisis. Firstly, we must acknowledge the profound disconnect between the metrological project of corporate sustainability and real ecological limits. Indicative of this gulf is the fate of the ‘Sustainability Context Principle’—a longstanding element of Global Reporting Initiative’s Guidelines that calls for organisational performance to be reported: “in the context of the limits and demands placed on economic, environmental or social resources, at the sectoral, local, regional, or global level”. However, it has never been implemented in the actual GRI Standards nor has any guidance been developed on how to take these contextual factors into account, leading one leading corporate sustainability practitioner to say: “…quite possibly it is the case that no GRI report ever produced has actually disclosed sustainability performance, per se.” A review of 40,000 corporate sustainability reports between 2000 and 2014 bears this out. Bjørn et al. found that only about 5 percent of companies mention some type of ecological limits. Of those, most did not provide detail on current or planned changes to address the issue (Bjørn et al. 2016).

Secondly, and fundamentally, if structures of corporate ownership condition engagement in sustainability in the foodservice sector, it is not at the level of the distinction between Private Equity ownership and publicly listed companies we should look. Rather we should look to the model of the corporation itself, of “shareholder value” and financialisation more generally (see e.g., Aglietta, 2000; Bakan, 2004; Davis and Kim, 2015; Evans and Habbard 2008; Shin, 2013). Of course, a politics of economic democracy has been with us for a long time. What is perhaps novel, and offers some grounds for optimism, is how the critique of the profit-maximising corporation is starting to be generated from within corporate sustainability itself. Iconic here are statements from Paul Polman, CEO of Unilever, widely acknowledged as a leader in corporate sustainability, that Unilever cannot pursue the sustainability agenda further in the institutional context of a shareholder owned 14

corporation. Polman floated the idea of Unilever adopting B-Corporation status (Confino, 2015; cf. Kim et al, 2016; Stubbs, 2017)13 before having to concede ground to shareholders in the face of a hostile takeover bid by Kraft Heinz (Edgefield- Johnson, 2018).

Sustainable consumption is fundamentally an issue of inequality: if the top 10% of emitters globally reduced their carbon footprints to the EU average this would cut global emissions by 33% (Anderson, 2016). Equitable near-term economic development of poorer nations is incompatible with global carbon budgets to constrain catastrophic climate change absent profound change in the socio-economic system that underpins global carbon emissions (Anderson and Bows, 2010). Seen from this perspective, genuinely sustainable consumption is only possible in the context of challenging the distinctively capitalist separation of the economic and the political in an alternative economic imaginary of socially determined need; beyond ‘the economy’ offered by sustainable development, and its epistemological premise that the future is beyond political control except through the political institution of yet more market mechanisms. Fortunately, the contours of such an alternative economic imaginary, and the institutional forms of economic ownership it supports, are increasingly evident.14

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Appendix: Political Economy in the UK Foodservice Sector The full sector should be understood as comprising both a consumer facing market and contract catering, with the latter having both ‘profit’ and ‘cost’ sub-sectors (e.g. institutional catering) (Standard Industry Classification 2007 codes 55-56.30, ‘Accommodation’ and ‘Food and beverage service activities’). Operating sectors can usefully be divided into: Restaurants; Quick Service Restaurants; Pubs; Hotels; and Contract Caterers (Leisure, Staff Catering, Health Care, Education, Services). (Horizons 2015). However, market research commonly separates the ‘Consumer Food Service’ market from Contract Caterers.

The UK foodservice sector is a £68.3bn market (Mintel 2017), which has grown considerably from £57bn in 2012 , with forecast growth of 11% to 2022 (Mintel 2017).This period saw a 7% increase in the number of transactions and a marginal decline in the number of outlets. For context, foodservice accounts for around a third of the total UK food and drink market and a third of the total ‘hospitality’ market (28% and 33% respectively, [Horizons 2015]). The sector employs 5.5% of the total UK workforce (1.78m), up from 5.1% in 2013 (ONS 2018).

The foodservice sector is highly segregated between large companies and small independent operators, with a growing segment of smaller company groups. In the restaurant sector 91% of enterprises have a turnover below £500k (see Fig 3 for the structure of the market )(ONS 2014). Around three quarters of outlets have fewer than 10 employees (Oakdene Hollins 2011). As Fine (1995) noted (in Warde and Martens 2000: 25), competition in the market almost conforms to an ideal-type free market, with low capital barriers to entry and large number of independent entrepreneurs competing for a freely-choosing consumer market. Dependent on discretionary spending, the market is also highly susceptible to economic cycles. The restaurant industry suffered heavily following the 2008 economic crisis but has subsequently recovered with the market’s value rising by 2.3% in 2015, representing the fastest rate of annual growth over the past 5 years (Keynote 2016). The restaurant market is extremely volatile in terms of business demography. Of 18,155 restaurants and mobile food service enterprises opened in 2011 only 33.7% survived five years later (ONS 2017).

The top 25 UK company groups in the foodservice sector have sales between £1600m and £100m, with the next biggest 25 groups between £99m and £25m, with a further 130 small groups with 5-25 outlets each. This last group has seen a significant growth of market share, growing 20% between 2011-2014 (Horizons 2015). Twenty-five global brand owners have a 72% share of the UK branded market between them and are increasing their share of the consumer market year on year. Franchising accounts for £15bn of the sector by sales and continues to grow significantly as a share of the market - multinationals tend to be stronger in franchising than domestic companies (Euromonitor 2017).

The overall trend is an increasing market share for company groups versus independents. For example, chains such as Mitchells & Butlers and Greene King, with several pub-restaurant brands 19

each, are expanding, The biggest ten restaurant chains have captured around 30% of the ‘casual dining’ market and have a combined turnover of roughly £2 billion (ECRA 2015). Independents accounted for 58% of total Consumer Foodservice sector in the UK in 2016 (this excludes contract catering), 6% down on 2011 and its growth rates were much lower than those registered by chained brands (Euromonitor 2017) (see Fig. 2 below).

Private Equity (PE) investment has had a significant effect on the ownership structure of the foodservice and hospitality sector in recent years. ‘Private equity’ (PE), used synonymously in the UK with the term ‘venture capital’, refers to medium to long-term finance provided in return for an equity stake in an unquoted company (BVCA, 2018). PE firms raise capital to invest directly into businesses and embark on value-generating rationalisation, performance-enhancing or restructuring programmes in order to realise their principal return on investment by selling the business, generally through stock market floatation, usually after between three and seven years (Jones, 2009). A large proportion of the growth in private equity funds over recent years has been through the provision of capital from institutional investors in the hope of achieving higher returns than investment in public stock markets (Cendrowski et al 2008).Thus, increasingly, PE firms represent intermediaries between institutional investors and companies under the PE firm’s ownership. Private equity emerged in the UK as an industry in the 1970s but developed rapidly from 1990s on, becoming one of the fastest growing ‘asset classes’. The British Private Equity & Venture Capital Association represents more than 300 PE firms and 120 institutional investors, with over £500bn under management (BVCA, 2018). Of the top 50 firms globally in terms of capital raised in 2016, seven were based in London (PEI 2017).

While no disaggregated data could be found for investment in the foodservice sector, PE has invested $38bn in the wider food and beverage sector between 2009-2015 (PEI 2017). Eight of the 18 largest restaurant chains are owned by private equity firms and in some cases ownership of chains has passed between PE firms (contrary to the typical investment strategy of stock market floatation). SSP Group, the sixth largest foodservice group in the UK was acquired by PE firm EQT in 2006 from Compass Group, until it was floated on the stock market as a Public Limited Company in 2014/15.

It is widely recognised that over recent decades there has been a shift in power in supply chains, with bargaining power more concentrated in retailers and primary producers taking on a subordinate economic role (Harvey, 2007). The sector has been largely integrated to this process. Major groups have the critical size for vertical integration of whole supply chains, enabling them to implement efficient, short supply chains to agricultural producers, whereas independents generally source from wholesalers and cash & carry, with logistics providers intermediating to producers (with the exception of niche short, local and regional supply chains). As with the division between the major company groups and independents, supply chains are characterised by on the one hand large food supply companies (both dedicated, such as Bidvest and subsidiaries of transnational food groups e.g. Unilever Food Solutions, Nestlé Professional, Danone) and commodity houses on the one hand, and much smaller wholesalers and suppliers on the other.

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1. Overall foodservice sector composition by number of outlets (Horizons 2015)

2. Consumer foodservice by independent vs chained: Units/Outlets 2016 (Euromonitor 2017).

Turnover Size Band Number of Enterprises

£0—49,999 3,270

£50—99,999 22,105

£100—249,999 29,020

£250—499,999 8,200

£500—999,999 3,445

£1M—4.99M 1,990

£5M+ 410

Total SIC5610 68,500 Fig 3. Restaurants and mobile food service activities (SIC 5610): Enterprises by turnover, 2014 data (ONS 2014)