THE M&S TRANSPARENCY STUDY: Research Report Prepared by GlobeScan GlobeScan Contacts For more information, contact: The data reported herein are provided on a confidential basis to MARKS AND SPENCER GROUP PLC (M&S). M&S is free to use the Caroline Holme findings in whatever manner it chooses, including releasing them to Director the public or media. [email protected] GlobeScan Incorporated subscribes to the standards of the World Association of Opinion and Marketing Research Professionals Perrine Bouhana Associate Director (ESOMAR). ESOMAR sets minimum disclosure standards for studies [email protected] that are released to the public or the media. The purpose is to maintain the integrity of market research by avoiding misleading Tove Malmqvist interpretations. If you are considering the dissemination of the Project Manager findings, please consult with us regarding the form and content of [email protected] publication. ESOMAR standards require us to correct any misinterpretation. May 2015 Agenda 1. Context 2. Overview 3. The State of Transparency 4. Transparency at M&S: Metrics and Issues Prioritisation 5. Transparency at M&S: Communications and Engagement 6. Conclusion 7. Appendix NOTE: In this report, all figures are percentages unless otherwise noted. CONTEXT Global Companies Face a Trust Deficit; Transparency is a Key Driver of Trust GlobeScan Radar 2014: General public study in 24 countries . Face-to-face and telephone interviewing (online in Israel) Unilever Is Viewed As The Number One Leader in Transparency; M&S Comes Fifth Transparency Leaders, Unprompted (Total Mentions), Total Sample, 2014 and 2010 18 2014 Unilever 4 2 2010 BP 2 6 Patagonia 3 2 HP 1 5 Novo Nordisk 3 1 Shell 5 Nike 5 3 GE 1 4 4 M&S 3 1 Timberland 2 Nestle 4 1 Ford 1 3 2 Interface 5 1 BT 2 Puma 3 The co-operative 1 Rio Tinto 3 2 1 IBM 1 Coca Cola 3 2 1 Vodafone 1 3 3 BASF 2 Walmart 1 Statoil 3 3 2 Natura 2 Starbucks 1 2 GlobeScan GSS 2014: Sustainability experts study conducted in partnership with SustainAbility. Online format. Q.2. Which individual companies do you consider leaders in transparency? Please enter a maximum of 3 companies in the spaces provided. Unilever Has a Strong Leadership Position in All Regions; M&S Is Particularly Strong in Europe Latin America / Asia Africa / Middle East Europe North America Oceania Caribbean Unilever Unilever Unilever Unilever Unilever Natura 17% 27% 19% 18% 16% 16% Nestle Woolworths Novo Nordisk Patagonia Interface Unilever 6% 7% 7% 13% 8% 13% P&G Nestle M&S Nike Novo Nordisk Statoil 6% 7% 7% 10% 8% 7% SAB Nestle Interface Westpac Rio Tinto 7% 4% 6% 8% 7% BASF Coca Cola GE Shell Interface BASF M&S M&S HP Nokia Patagonia J&J Novo Nordisk Rio Tinto BASF Novo Nordisk Nestle HSBC P&G BHP BMW Shell 4% 6% 7% 4% Anglo American Whole Foods GSK BT IBM Triodos Bank Ikea Virgin 4% Walmart 3% GlobeScan GSS 2014: Sustainability experts study conducted in partnership with SustainAbility. Online format. Q.2. Which individual companies do you consider leaders in transparency? Please enter a maximum of 3 companies in the spaces provided. OVERVIEW Our Starting Point Our Approach: Stakeholder Intelligence and Engagement Engagement Intelligence 4. Reporting, workshop, and Thought Recognised 1. Review of Leadership thought leadership Leadership existing research 3. Qualitative in-depth 2. Quantitative telephone interviews online survey (n=14) (n=172) Why Stakeholder Research Matters Stakeholders are: • Key players in transfer of information and #1 INFLUENCERS OF NATIONAL & creation of associations with brand INTERNATIONAL CONVERSATION • Opinion often carries extra weight • Control opportunities to access and engage #2 GATEKEEPERS the public & POTENTIAL ALLIES • Define context for doing business • Can amplify initiatives & actions • Predictive of consumer perspectives two to #3 five years later THOUGHT LEADERS • Provide insights into future context and how to future proof business model Why Stakeholder Research Matters Stakeholder views result from a range of consumer and professional experiences and associations: Stakeholder Mindset CONSUMER + PROFESSIONAL Brand Interaction Individual Values PRODUCT BELIEFS SERVICE KNOWLEDGE COMMUNICATIONS PRIORITIES PROFESSIONAL CONTACTS Influencers FAMILY & FRIENDS OTHER STAKEHOLDERS PUBLIC EMOTIONAL + RATIONAL Questions Areas and Flow Testing of Source of influence Transparency – its stakeholder and M&S benefits and risks engagement communications approaches channels State of Transparency transparency today performance vs Full overview of at large established issues importance stakeholder companies expectations, best practices, performance gap(s), and opportunities to Key trust and enhance transparency metrics communications and Best practices for M&S and engagement comparators Respondents Profile: Quantitative Online Survey (n=172) M&S Transparency Survey Demographics, Total Sample, 2015 (Online fieldwork took place between 12th January and 2nd February 2015) 1 Academia 1 NGO/think tank 6 16 8 3 Media UK 20 North America Consultancy 19 48 Latin America Corporate Europe (excl.UK) 25 Financial institution / 6 Asia SRI fund Other 29 Government 16 2 Other Q0x1. Before we start the survey, we would like you to please confirm which sector best represents you and your organisation Please select from the list provided below. Q0x2. Please select your country of residence from the following list. Respondents Profile: Qualitative Telephone Interviews (n=14) (Interviews fieldwork took place between 12th January and 13th February 2015) • Dan Crossley, Executive Director, Food Ethics Council • Prof. Dale Southerton, Director, Sustainable Consumption Institute, University of Manchester • John Elkington, Founding Partner and Executive Chairman, Volans • Prof. David Grayson CBE, Director: the Doughty Centre for Corporate Responsibility, Cranfield School of Management • Karin Kreider, Executive Director, ISEAL Alliance • Bob Langert, former VP, Corporate Social Responsibility, McDonald's Corporation • Katie McCoy, Head, Forests Program, CDP • Dara O’Rourke, Co-founder of GoodGuide, Associate Professor, University of California, Berkeley • Lena Staafgard, Programme Director, Better Cotton Initiative • Peter Van Veen, Director, Business Integrity Programme, Transparency International UK • Tensie Whelan, President, Rainforest Alliance • Andrew Winston, ‎CEO, Winston Eco-Strategies; author of The Big Pivot and Green to Gold THE STATE OF TRANSPARENCY According to Stakeholders, How Companies Share Information Matters as Much as What They Share Stakeholders define “transparency” as: • Communicating on • Data for the whole WHAT progress, successes, value chain failures • Issues of relevance to stakeholders HOW Providing Being open material and honest information Ensuring easy Engaging in access two-way dialogue HOW HOW • Easy access • Consultative mind-set • Multi-formats • Answering questions Online survey and telephone interviews: Q1x2. In your opinion, what does it mean for a company to be transparent? Stakeholders Want Contextual Information Around Data and Targets Purpose Vision Decision Making NARRATIVE and Governance AND CONTEXT AROUND Strategy and Plans DATA Deep Dives into Issues (risks and opportunities) Data and Targets “All the company does can be published in a “Show where things are made, with what, by newspaper.” whom. Make it easy to ask questions and (Online survey respondent) make an effort to answer them.” (Online survey respondent) “All is concocted through targets that the company aims to achieve – most of the time these targets are arbitrary and non-achievable. Targets are very restrictive – focus on very specific problems but these problems shift over time and this is not taken into account. The focus is to narrow on the targets – companies should look at the bigger picture in order to not be limited.” “I don’t want to see companies in gold fish bowls; I want to see interesting conversations (Telephone interview respondent) with companies.” (Telephone interview respondent) Online survey and telephone interviews: Q1x2. In your opinion, what does it mean for a company to be transparent? Trust is Viewed as the Number One Benefit of Transparency Benefits of Transparency for Companies, Unprompted, Total Sample, 2015 29 12 11 10 7 Builds trust Creates a better Enhances reputation / Facilitates stakeholder Enhances stakeholder understanding / brand loyalty dialogue, innovation, engagement and management of and problem solving relationships performance, risks, and opportunities Online survey: Q1x3. In your view, what are the main benefits of transparency for companies? Vulnerability is Viewed as the Main Risk of Transparency; Loss of Competitive Advantage Comes Second Risks of Transparency for Companies, Unprompted, Total Sample, 2015 33 24 9 6 6 Vulnerability / exposure Loss of competitive Loss of business or Overdisclosure (too Misunderstanding and to criticism advantage reputational value much information misuse of information shared) Online survey: Q1x5. In your view, what are the main risks of transparency for companies? Overall, Benefits of Transparency Outweigh Risks “Risks are perceptions. Some may feel threatened by exposure. For me the main risk of transparency is the lack of it.” Close to 1/3 (Online survey respondent) more benefits mentioned by “The age of control is over. In the long term stakeholders than risks there are more risks for not being open.” (Telephone interview respondent) Online survey: Q1x3. In your view, what are the main benefits of