Slide 1

Sustainability Project

Abbreviated Recommendations

Strategic Corporate Social Responsibility Class

May 2, 2007

Student Consultants: Sarah Anderson and Daniel MandelPrimary Liaison at Del Monte: Bonnie McFarland

Table of Contents

Project Background

Project Scope

Resources Used

Deliverables and Recommendations

Slide 3

Project BackgroundWal-Mart is Del Monte’s largest customer and has come in with its new expectations for its suppliers, including very stringent requirements.

Del Monte does not have a sustainability policy. It engages in some sustainability efforts, but has not collected information or set goals.

When the project started, the company was at the beginning stages of a sustainability initiative.

We were contracted to deliver the following…

Slide 4

Project Scope

1. Sustainability vision and policy

2. Internal strategy to manage sustainability efforts

3. Process for communicating sustainability efforts

23-Feb 2-Mar 9-Mar 16-Mar 23-Mar 30-Mar 6-Apr 13-Apr 20-Apr 27-Apr 4-May 18-May

Phase 1: Research

Phase 2: Sustainability vision and policy

Phase 3: Strategy to manage sustainability efforts

Phase 4: Communication strategy

Phase 5: Final Deliverables

Slide 5

Resources

Internal– Team Meetings and Individual Interviews

– Matt Materazo – Sales Strategy– Bonnie McFarland – Graphic Design &

Packaging– Scott Butler – Operations and Services – Steve Balling – Agricultural Services– Jarod Cook – Environmental Services– Jeff Ratcliff – Business Development (Wal-

Mart Relationship)

– Internal Survey – 32 Senior Level Managers

External– Company Benchmarking– In-Class Resources and Slides– CSR Readings– Internet Research

Project OverviewBenchmarking Companies

Company Industry Revenues Employees Headquarters

Del Monte Consumer Goods (foods) ~3B 7,500 San Francisco, CA

Dole Agriculture / packaged foods ~6B 45,000 West Lake Village, California

Starbucks Restaurants ~6.5B 145,800 Seattle, Washington

Clorox Household/Personal Products

~4.5B 7,600 Oakland, California

Sysco Wholesale – Food and Grocery

~30B 47,500 Houston, Texas

DuPont Chemicals ~28.5B 60,000 Wilmington, Delaware

General Mills Consumer Goods (foods) ~12B 28,100 Minneapolis, MN

Whole Foods Natural and organic foods Supermarkets.

~5.8B 36,200 Austin, TX 

ConAgra Consumer Goods (foods) ~11.7B 33,000 Omaha, NE

Unilever Consumer Goods (foods) ~52.8B 206,000 Rotterdam, NetherlandsLondon, UK

Nestle Consumer Goods (foods) ~81.5B 265,000 Vevey, Switzerland

Overall CSR Vision

Sustainability Policy/Vision• Business Case• Current Practices • Examples of Programs

StakeholdersCSR ReportWebInternal Communications

OrganizationResourcesExternal ValidationPartnersStandardsCertificationsKPI’sSuppliers

Internal Strategy

Sustainability

Communications

Project OverviewBenchmarking Outline

Deliverables and Recommendations

• Business Case

• Sustainability Vision and Policy

• Sustainability Management and Communications Strategy

• Implementation Action Plan

Business CaseWAL – MART

Not adopting a sustainable strategy can be viewed as not supporting its initiatives

Companies that do not follow its initiatives are the ones that do not receive long-term support

CUSTOMERS REQUIREMENTS / REGULATIONS

Ability to address the requirements of most customers in the future

Stay ahead of changing environmental requirements (both business and regulatory driven)

EMPLOYEES

Increase employee satisfaction and motivation leading to higher retention and lower costs

Attract strong employees as many graduates are evaluating companies on sustainability

BRAND

Strengthen relationship with consumers and retailers and protect against potential deterioration

Remain competitive – many competitors are ahead of Del Monte already

OPERATIONS

Direct cost savings: Less and more efficient use of resources (e.g. energy, water, packaging)

Over the long term, secure sustainable supplies of fish, fruit, vegetables and water

Sustainability Vision and Policy

General Recommendations:

• Communications– Very high level vision to show commitment to sustainability– Deeper policy to be used as a guide for planning and setting main initiatives– Communicate strategically to most relevant stakeholders

• Constant Evaluation– The policy should always be directly linked to business principles and strategy– The policy should be adapted to changing environments and priorities

• Future Actions– Use vision and policy as the basis for your sustainability reporting– Link vision and policy to an overall CSR vision and leverage in all areas of the

business

Think of the sustainability policy as Del Monte’s formal signal, both internally and externally, that the company is serious about sustainability

Sustainability Vision

At Del Monte, our corporate vision is to nourish families and enrich lives. Our vision touches all aspects of our operations, and in pursuing it, we strive to provide high quality and healthy products while preserving the earth’s limited resources for current and future generations.

We are committed to our consumers, employees, shareholders and the communities in which we operate. We recognize we are part of a larger community and we strive to protect the environment and the natural resources on which we all rely, and are dedicated to the environment and to exploring ways to be more efficient and innovative in the use of resources and in our operations.

1. Overall Policy

2. Goals and Objectives

3. Main Initiatives

1. Overall Policy

2. Goals and Objectives

3. Main Initiatives

Sustainability Policy Components

Policy - Overall PolicyDel Monte’s policy has always been to comply with all applicable laws and regulations of the United States of America and of all other countries where we do business. We have a dedicated team of experienced professionals responsible for guaranteeing that our business activities comply with the law, and we continuously seek innovative ways to reduce environmental impacts and resource intensity of our operations, while supporting our ongoing business objectives and generating new business opportunities.

We view environmental protection not only as our obligation, but also as an area of opportunity. As a result of this belief, we have begun a substantial effort to go beyond compliance in a number of key environmental areas.

As a primary processor of agricultural and fisheries products we are intimately connected to and constrained by the ongoing health of the environment. From our suppliers to our plants to our final products, we are passionate about doing the right thing to meet the needs and improve the quality of life of the present generation while protecting Earth’s resources for future generations.

Del Monte will work and share information with employees, suppliers, business partners and other stakeholders to understand better our environmental impact. We will encourage all of our partners to share our vision.

Policy – Goals and ObjectivesWe will seek to accomplish these objectives without compromising product quality and while maintaining safety operations and cost reduction as our priorities:

AGRICULTURE

Our goal is to produce the highest quality and most efficient crops possible while following responsible agriculture practices.

We are consistently seeking new ways to protect the soil, use water efficiently, conserve and enhance biological diversity and minimize our use of fertilizers and pesticides. We will also strive to

work with our current family farms and support their sustainability efforts

FISHERIES

Our goals are to protect marine life (dolphins, whales, and other marine life) and not lead to over-fishing or depletion of the exploited populations

We will not purchase any tuna caught in association with dolphins and refuse to purchase tuna caught with gill or drift net. We condemn the use of these indiscriminate fishing methods to trap

dolphins, whales, and other marine life along with the intended catch of fish. We require certification that all tuna we purchase is dolphin-safe.

PACKAGING

Our goal is to use environmentally friendly packaging solutionsWe will enhance recycled content, recycle-ability and reusability, reduce chemical inputs, remove

and reduce packaging and use more effective materials.

Policy – Goals and Objectives (cont)

MANUFACTURING

Our goal is to find sustainable, environmentally friendly, and economically feasible ways to improve production methods.

We are constantly seeking ways to reduce and manage waste, reduce greenhouse gas emission and reduce water and energy consumption.

TRANSPORTATION

Our goal is to find sustainable, environmentally friendly, and economically feasible ways to improve transportation methods.

We are constantly seeking ways to reduce emissions, reduce freight distance, and increase payload per truck.

SUPPLIERSOur goal is to align ourselves with suppliers that also strive to protect the environment. We have similar expectations for our suppliers as we have for ourselves. We expect them to comply

with all the regulations and laws as well as pursue sustainable alternatives.

BUILDINGS AND OFFICE SPACE

Our goal is to operate efficiently using the necessary resources in a responsible way We will strive to implement recycling practices in all of our locations, be less dependent on and use less paper, use more recycled content products, be more energy efficient, use more “green” office

supplies, and implement LEED standards when possible.

Completing the Policy – Main Initiatives

First, pick the initiatives to include:

• Use decision matrix (next slide) to help selecting initiatives • Start by using the current cost reduction initiatives related to

sustainability (e.g. packaging reduction)

Then, talk about those initiatives:

• Explain why you have chosen these initiatives• Describe main programs and plans associated with each initiative• Describe how the initiative is contributing to impact reduction• Measure, monitor and report progress to relevant stakeholders

Initiative

Wal-Mart relevance

Cost Reduction (ROI Short

Term)

Long term impact

Ease of implementation (risks, resources,

suppliers support…)

Sustaina-bility

impact Total Score

35% 20% 5% 20% 20%

Green office

Reduce Packaging

Reduce Pesticides

Main Initiatives: Evaluation Matrix

Slide 17

Business Case

90

60

40

Deliverables and Recommendations

• Business Case

• Sustainability Vision and Policy

• Sustainability Management and Communications Strategy

• Implementation Action Plan

Structure RecommendationRegardless of whether you have a highly integrated and centralized department with primary sustainability responsibilities or a more decentralized structure, it is essential that there be accountability throughout the organization as well as cross-functional interaction and staff support

BOARD OF DIRECTORS

EXECUTIVE LEVEL

SUSTAINABILITY LEADER

MANAGEMENT AND SPECIALIZED STAFF

CROSS-FUNTIONAL INTERACTION

No board changes are suggested at this time

Assign task members of executive committee to have sustainability overview

Implement Hybrid Approach: Senior leader (hire / internal promotion) responsible for strategy and coordination with individual department leaders responsible for implementation efforts.

With oversight of sustainability leader, manage efforts within business units

1. Sustainability team comprised of senior staff with sustainability responsibilities2. Sustainability charter added to existing cross-functional committee3. Team formed to focus on specific topic or task

Adapted from Designing a CSR Structure - Business for Social Responsibility

Sustainability Team Responsibilities

1. Identify Issues

2. Define Programs

3. Evaluate Progress

4. Document and Report

5. Engage Internally

6. Engage Externally

The environment should become part of Del Monte’s regular decision-making process

Del Monte Action Plan

Immediate Term Goals

(May-Dec. 2007)

Management• Hire (or promote from within) individual to manage

sustainability efforts• Determine point people in all departments• Create definitive job requirements and time commitments• Develop clear reporting responsibilities

Engagement and Communications• Document all current sustainability projects and collect

“stories” about sustainability• Develop plan to effectively communicate to Wal-Mart • Educate upper management

– Business case, benchmarking, best practices, survey results

• Engage employees–Create online education tool for employees–Develop monthly sustainability newsletter

Del Monte Action Plan (cont)

Medium Term Goals

(by Dec. 2008)

Management• Continue with all “sustainability team responsibilities”• Develop goals and metrics for measuring efforts• Develop performance appraisal for employees• Explore innovation products• Explore new partnerships

Engagement and Communications• Incorporate sustainability initiatives into retail “sales pitch”• Integrate sustainability vision/policy into financial reporting• Research external reporting alternatives • Further map relationships with other stakeholders to

determine longer-term communications plan• Engage suppliers• Engage new hires

Del Monte Action Plan (cont)

Long Term Goals

(by Dec. 2010)

Management• Consider alternative sustainability projects given changing

stakeholder attitudes • Increase internal resources• Integrate sustainability into all relevant decision making

processes

Engagement and Communications• Integrate sustainability into packaging (social labeling)• Implement long-term sustainability reporting initiative• Align with sustainable suppliers• Integrate sustainability policy into broader CSR policy

Q & A