Corporate social responsibility seemed to be three words on the lips of most speakers at the London conference of the International Egg Commission.
IEC chairman Joanne Ivy said a new corporate social responsibility working group had been established by the commission to examine the implications of CSR for the egg industry, whilst IEC council officer Tim Lambert pointed to evidence of how it may begin to impact upon egg producers.
He said he had been at a recent meeting attended by representatives of major organisations like Tesco and Walmart and it was clear that it was an issue that major retailers were taking seriously.
Minimising transport, maximising recycling and community projects were all examples of corporate social responsibility and major retailers would want to know what their suppliers were doing.
"It will mean long term investment for us. It is going to impact on the egg industry and we need to pay attention to it," he said.
David Hughes, emeritus professor of food marketing at Imperial College London, said the industry had to take the issue seriously because those suppliers who failed to do so would be dropped by the big retailers. "Suppliers who do not sign up to this face de-listing," he said. "They will say if you don’t sign up you will not be in our supply chain."
Prof Hughes said that Walmart had set itself targets for recyclable and sustainable products. "When major players do something and put targets on themselves you know something is up because special interest groups will watch them and they will hammer them if they don’t hit those targets," he said.
"Walmart has set itself global sustainable interest goals,’ said Prof Hughes and he said that anyone who wanted to supply Walmart would need to be able to show that they were doing the same.
He said that another major retailer, Tesco, has experimented with putting the carbon count on some products. Some 22 million people did their shopping at Tesco and former CEO Terry Leahy had said about half of them had some idea of carbon footprint and would like it reduced. As a result of this, Tesco was asking suppliers to reduce carbon footprint, said David Hughes.
He said that when Marks & Spencer had announced that it intended to be carbon neutral by 2012 he had gone cold because he knew it would mean Marks & Spencer and its suppliers being carbon neutral by 2012 and that M&S would be asking suppliers how they intended to achieve this goal.
Prof Hughes said that suddenly all the talk was about things being sustainable and recyclable. That did not just involve carbon reduction. There were also questions about how much water a product used in a world where water resources could be scarce.
Nestle was investing half a billion dollars in health science and Whitbread, the largest restaurant chain in the UK, was making green pledges. "Will consumers pay more for green and sustainable products?" he asked. "I don’t believe they will, but if you are claiming that a product is premium they will expect that it is better for the environment and that it is ethically produced," he said. "It will be an entry ticket to the market you want to penetrate."
He said the UK Government was saying that we needed to produce more food from less. It was also saying that consumers should constrain consumption of meat and dairy. "You have to be careful that you are not included in that."
Nan-Dirk Mulder of Rabobank was another speaker who warned that the egg industry would face more and more questions about how their eggs were produced. "Clients are going to ask you a lot more questions about how conscious you are as an industry about using resources," he said, although he said the egg industry did have some advantages over other areas of agriculture. "
One interesting issue is the CO2 use differences between different commodities. The egg industry is in a pretty good position. You have a story to tell. This may be an opportunity for you," he said. Eggs provided the cheapest source of animal protein, they offered efficient feed conversion and they had a low carbon footprint.
The low carbon footprint of egg production was confirmed to IEC delegates by two scientists who have been undertaking life cycle assessments of farm animals. Dr Michael McLeod of the food and agricultural organisation of the United Nations said that egg production displayed low greenhouse gas emissions intensity due to high feed conversion efficiency. Dr Adrian Williams of Cranfield University concurred. He said, "Eggs have a relatively low global warming potential per unit of edible protein."
Dr Williams also analysed the different methods of egg production to ascertain whether any system performed better than the others in terms of environmental impact. He said there were no real differences between the systems in terms of carbon footprint.
The evidence of such scientists may play an important role in the egg industry’s future dealings with supermarkets, for a former commercial director with Tesco told IEC delegates that environment and community were "important levers that were just starting to emerge" amongst retailers.
"Community in terms of giving something back to the neighbourhood and environment in terms of being green," said Steve Murrells, former commercial director for fresh foods with Tesco and now the UK chief executive for the Danish meat giant Tulip. "We have a number of community projects with local groups and I think it is going to be more and more important for big businesses to do this in the future.
The environment agenda it is in our interests to embrace because it is a way to drive out costs by being greener. Our business has a very clear five-year environmental plan that says we are going to reduce our utilities bills by between 10 and 15 per cent through green innovation and green technology. If we do these things and we can cope with them then we will win rather than lose."
David Hughes also pointed to the financial benefits of addressing environmental issues.
"As Terry Leahy says, reduced carbon means reduced cost." He also referred to Unilever’s view of the issue. "Unilever says that tackling sustainability will drive innovation, grow markets and, in many cases, reduce costs."
Many business leaders see clear commercial benefits in pursuing the corporate social responsibility agenda. The IEC has acknowledged that there are potential implications for the egg industry by establishing a committee to look into the issue.
