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Corporate Social Responsibility In the Food Industry

Table of Contents

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1 Introduction 7

1.1 Expansion of the company’s purpose …………..7

2 Corporate Social Responsibility 8

2.1 Definition of CSR and its evolvement 8

2.2 Criticism of the concept of CSR 9

2.3 Importance of CSR today 10

2.4 Controversy of the concept of CSR 11

2.5 Passive versus Proactive CSR 11

3 CSR in global retailing and restaurant businesses 12

3.1 Going beyond the idea of profit maximization 12

3.2 “Green” practices in the food industry 13

3.3 CSR of Tyson Foods 14

3.4 CSR of Ben and Jerry’s 15

4 CSR reporting 16

4.1 Global Reporting Initiative 16

4.2 United Nations Global Compact 17

4.3 Benefits of CSR reporting 17

5 World Hunger 18

5.1 World hunger today 18

5.2 Historical background of hunger 19

5.2.1 Ongoing food crisis 19

5.2.2 The Dark Ages 19

5.3 World hunger: critical zones 20

5.3.1 Devastated state of the Republic of Haiti 20

5.3.2 Critical food situation in Africa 21

5.4 Theories of Malthus and Boserup 21

5.5 Improvements in fighting hunger 23

5.6 How Companies have Battled Hunger 25

5.7 The Motivation of Corporates to Fight Hunger 27

5.8 Fighting Food Scarcity in the Future 29

5.9 World Food Programme 31

5.10 PepsiCo and Zero Hunger mission 31

5.11 Why Companies Should be responsible for Fighting Hunger and Food Scarcity 32

6 Natural environmental protection 33

6.1 Impact of human beings on environment 33

6.2 Economic and political influence on the food market 35

6.3 Natural disasters and food industry 35

6.4 Environmental responsibility of companies 36

6.4.1 Walmart 37

6.4.2 Tesco 38

7 Food waste 39

7.1 Crucial problem of food waste 39

7.2 How to reduce food waste 41

8 Supply chain responsibility 42

8.1 Corporate social responsibility in the supply chain 43

8.2 Starbucks and McDonalds as examples of sustainable supply chains 44

8.3 US food supply chain 45

8.4 Barriers to sustainable supply chain 46

8.4.1 Role of governments in CSR 46

9 Practical part. Interviewing 47

10 Conclusion 52

11 Bibliography 54

Abstract

Food retailing companies buy, sell, often produce their own food products, and utilize surplus and waste. These organizations have a big role in the society and this is why their contribution to the wellbeing of the society and better world is significant. Food is a social good that society needs in everyday life. There are still a lot of malnourished people and people suffering from hunger both in developing and even developed countries. Therefore, contribution of companies in this area means a lot for people suffering around the world. Retailers focus their philanthropic activities on food topics: these include product distribution, people in need, educational projects dedicated and healthy eating. It is also specific that the CSR initiatives are distributed along the whole chain of companies starting from agricultural production and ending with waste disposal.

Introduction

According to Gundersen, Kreider, and Pepper, food security can be defined as the state that all people can access food at all times.[1] Food security has been found to be a threat to third world countries and in most places in Africa. Leather asserts that food insecurity in these areas is caused by various factors such as political instability and high poverty levels.[2] Despite the harsh conditions that prevail in these regions, much can be done to remedy the situation. In developed countries such as the United States, companies that deal with the production of food have much that go into waste due to excess supply compared to demand. In the recent years, other organizations that have also joined to fight the problem of hunger. These companies have played a pivotal role in ensuring a constant supply of food in areas that the faced with the threat of food scarcity such as Africa, Haiti and Latin America.[3] This paper expounds on the role of corporates in fighting food scarcity in countries that are faced with constant hunger.

Expansion of the company’s purpose

During last few decades, the global community has changed its views towards businesses and their operations. More attention is dedicated to non-financial performance of the company. Companies across a variety of different industries focus their devotion on the company’s image and brand reputation. That, in turn, has influenced the manner in which businesses operate in the current world. Companies’ purpose today is expanding the idea of solely profit generator. Management in the companies is facing new challenges and tasks that are linked with social and environmental issues, which in turn have a close link with business operations. One of those challenges for business in general and retailers in particular, is the question of how to continue being profitable and gain economic benefits and at the same time reduce negative environmental impact. International environmental organizations such as Greenpeace and World Wildlife Fund have significantly influenced on companies to take measures in order to reduce negative impact that they have on the environment.[4] The so-called “green consumption” trend, namely, adoption of environmentally friendly habits and behavior, has also helped to promote the idea of nature conservation. The paper aims at analyzing the impact that CSR has on the business belonging to the food industry specifically, whether or not this approach is beneficial for them and what possible suggestions and improvements could be made in the area.

Corporate Social Responsibility

Definition of CSR and its evolvement

Despite the fact that there exists a large number of approaches of understanding and implementing CSR concepts, common to them is the idea of achieving goals of sustainable development, meaning the satisfaction of the needs of the present generation without creating threats to meet the needs of future generations. This topic is gaining more audience today due to the processes of globalization, widespread concerns with such issues as environment and international human rights.[5] The emergence of the concept of corporate social responsibility in business could be attributed to the beginning of the nineteenth century, when the Industrial Revolution and the movement in defense of workers’ rights took place.[6]

Criticism of the concept of CSR

Since the emergence of the idea of CSR, different points of views towards the topic were raised. Among one of the main opponents of the concept is considered to be Milton Friedman, Nobel laureate in Economics.[7] He insisted, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits as long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”[8] Companies should be doing what they are good at: conducting business for profit. They need to have a clear purpose and competitive advantage. By spending its’ resources on different types of benevolent programs, companies lose the focus, stop being efficient and that has a negative impact on society. This government should be taking care of the social wellbeing, which is their responsibility.

Another opponent of the CSR theory is Austrian scientist Friedrich August von Hayek. He introduced the theory of individualism and competition. He concluded that actions of the government that wants to ensure substantive equality within society or implement policies aiming at equitable distribution could not be compatible with the idea of formal equality of people. According to the scientist, these actions of the government will only lead to a destruction of the rule of law. It is nearly impossible to use and apply the same method to different people and get the same results from everyone.[9]

The concept of corporate social responsibility is constantly exposed to full criticism. Some people think that CSR measures reduce the effectiveness of the company, lead to bigger expenses, mass layoffs, and thus, the increase in unemployment in the country. According to them, CSR measures implemented by companies tend to increase the number of social problems. Moreover, some critics say that concept of corporate social responsibility is only a tool for companies to improve their image, receive commercial benefits and make both public and the government to look away from the harming influence they have on the environment, exploitation of cheap labor and ethical issues. They believe that corporations that exist solely to maximize profits are unable to act in the interests of the society as a whole.

Importance of CSR today

There are many supporters of Friedman’s theory. However, in today’s globalized world, huge environmental problems, which are caused by operations of businesses, and deplorable state of developing economies, leading to unemployment and famine in the societies, companies should take measures to stop harming the environment and start taking care of the society and community they operate in and produce goods for. The classical model of CSR is based on the fact that rational economic interests orient business not only in a way to maximize profit but also to improve their own environment including social, environmental, political aspects through the voluntary investment of profits in relevant institutions and programs.

One of the first academics who opposed Friedman’s theory was Freeman. He supports the stakeholder theory meaning that everyone who has an interest or a stake in the firm or who can affect or is affected by its operations. According to Freeman, managers have to “bear a fiduciary relationship to stakeholders”.[10] One of the arguments academic used was that the corporation has legally binding contracts with all participants who are suppliers, shareholders, customers, employees. Secondly, there are always external factors that have an impact on the organization. Political, economic, social, technological, legal and environmental (PESTLE) factors are among those that have influence on the businesses. It is important for a company to be aware of those externalities and not be focused just on internal shareholders perspective.

Controversy of the concept of CSR

The issue of corporate social responsibility is becoming more important nowadays. Consumers require companies to focus not only on the main goal – making profit, but also provide sustainable growth and become more socially responsible for its actions. Many people believe that implementation of CSR activities benefits the company: whereas others think that it brings more harm than good. Despite the ongoing debate concerning the topic, it cannot be denied that CSR is of great importance for businesses. CSR is about how companies make profits, not where they spend them. Consumers are among most important and influential stakeholders of the company, so the latter one needs to understand and respond to their needs. Moreover, businesses should know what value CSR activities bring to consumers. Since the concept of CSR does not have a clear definition, people have different views on what it really means, which is becoming confusing. For this reason, companies do not have a clear idea what kind of CSR measures they should implement in order for them to be effective and efficient. Furthermore, management in the companies lack knowledge of what exactly public wants from them and how thorough CSR activities should be in order to satisfy the public.

Passive versus Proactive CSR

Companies have different levels of implementing CSR. These include the passive and proactive techniques. The passive approach requires minimum company’s effort to comply with regulations and standards enforced by governmental institutions. “Passive CSR indicates responsible business conduct that enhances shareholder values by complying with the law.”[11] Among examples that show passive environmental CSR are obeying the rules on food waste and acquiring environmental permits. Companies usually use this approach in order to reduce risks and avoid negative consequences such as bad company image or publicity. The proactive approach means that companies are willing to spend more on CSR activities and undertake ethical and discretionary activities that exceed legal requirements of the state. Proactive CSR approach means “responsible business practices adopted voluntarily by firms that simultaneously support sustainable economic, social and environmental development at a level above that required to comply with government regulations”.[12] Companies practicing this approach are focused on long-term sustainability results and try to satisfy its stakeholders for future payoffs.

CSR in global retailing and restaurant businesses

Going beyond the idea of profit maximization

As was mentioned before, businesses in a civilized society should be focusing on not only profit maximization but also the wellbeing of the society. This is not their primary responsibility to act in the interest of the public; a voluntary action that some companies have decided to take. Nowadays, in order to have a well-functioning business, it is necessary to consider factors that go beyond classical economic theory. The funds utilized in social and charitable programs reduce current profits. However, in the long term, these measures create a favorable social environment and, consequently, sustainable profits. Nonetheless, many companies still consider the phenomenon of corporate social responsibility as an unnecessary feature. Companies that operate and do everything to increase its profits in the end of the day do bring social welfare. In case when those two (profit and social welfare) go opposite directions, the top management will most likely ignore the latter one and support the side of shareholders.[13]

The state might not be capable to implement measures for the social protection of the population and effectively solve problems that arise in the society. Therefore, businesses are increasingly demanding to take a seat as the new subjects of social policy. Charity and sponsorship projects where organizations take part perfectly complement the tools of marketing and PR-activities of any company. These activities expand one’s group of business partners, create more opportunities to advertise, promote and strengthen corporate culture, and maintain positive reputation. These practices make the company more stable and competitive on the market in the region and in the country.[14] The need of business for social stability and social trust is increasing. Society loses confidence in business when the only focus of it is profit maximization and when it refuses to participate in solving important social problems, shows irresponsibility and provides less than customers expect. Mutual collaboration of companies on the CSR topic makes them stronger and more effective in creating more sustainable approach in both production and consumption of goods.[15] CSR has become one of the major priorities of businesses in the global retail and consumer goods sector.[16]

“Green” practices in the food industry

People nowadays expect much more from companies. They want organizations to have positive impacts in the lives of ordinary citizens by contributing to social development. Companies today do more in terms of CSR than just donating money to charity organizations. Being a “good citizen” is beneficial for companies and they start to understand that and act in certain ways.[17] CSR practices have positive impact on organizational results mainly reducing financial risks and improving customer attitudes and behavior. They encompass four components: obedience of laws and ethical norms, treatment of employees fairly, protection of the environment, and contribution to charities. The US has a very high consumption of restaurant meals. Regular restaurant practices can contribute to the depletion of the natural environment, by use of the land for construction, excessive usage of gas, water and electricity, dangerous chemical products and so on. Restaurants should engage in “green” practices in order to become environmentally friendly. Moreover, customers are willing to pay more for ‘green’ products and services. These “green” practices may influence and increase employee satisfaction, which in turn may lead to better services and increased customer satisfaction.[18]

CSR of Tyson Foods

One of the American companies in the food industry that has been doing a great job in corporate social responsibility is Tyson Foods. The institutions operate in more than 130 countries around the world and promote responsible and sustainable business, support their employees and local communities and enhance food safety in the market.[19] As was already mentioned before, today companies need to take into account interests of all stakeholders. Tyson Foods is “a company of people engaged in the production of food, seeking to pursue truth and integrity, and committed to creating value for our shareholders, our customers, our TEAM Members, and our communities.”[20] Among the achievements of the company are multiple charitable donations, hunger relief program, Tyson Foods Fellows teaching program, Project A+ and many others. For instance, Tyson Foods Fellows teaching program helps to spread the knowledge about food production, agriculture, and sustainability. This program can help Tyson Foods and other companies interested in improving social life to spread the relief hunger program to other areas of the planet that are in need.[21] Tyson Project A+ is another interesting program made to help local schools to raise funds for its development. In this case, the program benefits both parties: company attracts consumers and makes them buy their products, whereas children get improved school equipment or activity program.[22] These types of social activities of Tyson Foods helped it to be named one of the best corporate citizens in 2015.[23] Each year the company is improving its position on the global arena by improving environment and social aspects.

CSR of Ben and Jerry’s

Ben and Jerry’s is another example of socially responsible organizations. The company was founded in 1978 in Vermont. According to the website of the company, they have three primary missions: product, economic and social missions. Making fantastic ice cream, using highest quality, natural and healthy ingredients, providing sustainable financial growth as well as providing career growth opportunities for employees and making the world a better place. “Central to the Mission of Ben & Jerry’s is the belief that all 3 parts must thrive equally in a manner that commands deep respect for individuals in & outside the Company & supports the communities of which they are a part.”[24] In the year 1985, the food company began investing in community-oriented projects. The institution has a long history of supporting environment and looking for ways to reduce the environmental impact of their company.[25] “Ben & Jerry’s is an iconic social business.”[26] It does a huge work on social and environmental improvements since its establishment. Besides measures of improving environment, Ben and Jerry’s support mandatory GMO labelling, saying that people have a right to know what is inside their food. Moreover, they support fair trade, meaning fair prices for farmers’ products, and farmers in developing countries who receive Fairtrade social premium if conducting environmentally friendly farming practices. Every ingredient that the enterprise uses to produce the final good has to be Fairtrade Certified.[27] It is essential to recall that the community needs the support of the business and the business cannot successfully exist without the support of local communities.

CSR reporting

Global Reporting Initiative

Consumers have also changed in a way they choose a specific product, particularly in developed countries. The customers prefer goods and services that have less harming effect on the environment. In order to inform the customers, shareholders and other stakeholders of the business, companies prepare and publish corporate social responsibility reports. For example, the Global Reporting Initiative (GRI) was established in the year 1997 by non-profit organizations such as the Coalition for Environmentally Responsible Economies (CERES) and the Tellus Institute. In the year, 2000 GRI established the first guidelines for comprehensive sustainability reporting on a global level. Nowadays more than 10000 organizations publish corporate social responsibility reports, most of which are based on the GRI guidelines.[28]

United Nations Global Compact

The United Nations Global Compact was incepted in the year, 2000. The purpose of the organization is to encourage and support businesses to implement sustainable and socially responsible policies as well as provide reports on their execution. Companies are expected to do their business based on certain ethical principles. The Global Compact defines those principles in several areas: human rights, labor, environment and anti-corruption. The main objective of this corporate sustainability initiative is to ensure that companies contribute to the solution of global problems. More than 9000 companies and 4000 non-businesses from more than 170 countries participate in this initiative.[29] Nowadays, since a number of companies use corporate social responsibility in its own benefits to make a good brand image. These institutions have been found to handle CSR with limited regards. In spite of this, environmentally and socially responsible companies have a confirmation with a certain data about operations of those businesses. To ensure that this information is available to the public, companies are required to release reports on corporate responsibility. These reports are a good investment for companies as they improve the position of the company in the eyes of its stakeholders, shareholders and the entire society.

Benefits of CSR reporting

Companies today provide sustainability reports, which bring both internal and external benefits for companies and organizations. The documents help them to understand and communicate the impact that their business has on the environmental and social aspects. The internal benefits include the understanding of risks and opportunities organization might face, influencing long-term strategies and policies, and eliminating number of implications in environmental, social and governance failures. The external benefits of sustainability reporting are the reduction of negative social, environmental, governance impacts, enhancing reputation and brand loyalty, and making stakeholders understand the true value of the company.[30] Thus, companies should be conducting these reports and enhance transparency of their actions. The principle of openness or transparency means that the company operates in public and its activities made clear, accurate and accessible. Corporate social report is a tool that helps to inform employees, customers, shareholders, partners, and society about the pace that the organization uses to implement its strategic development plans in respect to economic stability, social prosperity and environmental sustainability.[31]

World Hunger

World hunger today

The absolute need of every person on earth is the right to adequate food, which is legally enshrined by article 25 of the Universal Declaration of human rights. However, the situation nowadays suggests that often these rights are violated. According to the United Nations Food and Agriculture Organization between 2014 and 2016 795 million people out of the world’s 7,3 billion were suffering from undernourishment. A good percentage of these people reside in the developing world.[32] Despite the fact that the percentage of hungry people is decreasing with time, this topic remains considerable and has great importance to society. Statistics indicate that one out of eight of the people in underdeveloped nations are suffering from hunger. In the Sub-Saharan region, nearly a quarter of population lacks food[33] that is plenty in developed countries. The issue of food scarcity is most urgent problem in developing countries. It is not possible not to pay attention to it, because in today’s globalized world countries are dependent on each other due to global trade, international flow of capital and knowledge.

Historical background of hunger

Ongoing food crisis

Food crisis is a global problem because it affects the interests and fates of the majority of population thus threatening humanity. With a serious decline in living conditions, the issue requires urgent and immediate actions by the world community. In 1960’s – 70’s the main issue was considered preventing a global nuclear war. Today, experts place the environmental problem, demographic problem, and problem of poverty and underdevelopment in the forefront of the major concerns in the world. The lack of food however, has accompanied humanity throughout its history. In the Greek mythology there was a personified spirit of hunger and starvation called Limos.[34] Up to the 14-15th centuries millions of people around the world were repeatedly mowed by hunger. After hunger followed different kinds of epidemics such as empty fever, plague and other diseases that caused massive life losses.

The Dark Ages

The Dark Ages in Britain were genuine dull times; not just by the name. Several historical events existed that influence the name of this historical period, such as Hundreds Years War, Avignon Papacy or the Great Schism. These events gave a name to this period and contained several different time frames that made Dark Ages even darker. Looking at the period from the point of view of economics and food industry, the greatest disasters were Great Famine and Black Death. Great Famine proved how influential nature can be in the economics and well-being of the people, and how such an easily taken event as late freezes in April can devastate whole harvest. Such disasters influence not only the economics of the country but also the well-being of the people. Considering few examples, historians assert that years following 1315 contained numerous natural disasters while the subsequent years were very scarce on the harvest because of the nature influences, implying that the period of huge famine was at its peak. It took almost ten years, for the economy of the country to establish again, bringing more food to the tables of the people, however in this period since 1315 around 10 to 15 percent of population died because of the sicknesses that famine helped to spread, such as pneumonia, bronchitis or tuberculosis.[35]

World hunger: critical zones

Devastated state of the Republic of Haiti

Another example, which is more up to date, is the calamity that dwelled in the Republic of Haiti, located in North America. The country recently experienced the Hurricane Matthew, one of the fiercest in the last decade. Because of the natural disasters, poor hygiene and contaminated water, population of the island had higher risks of being infected with diseases such as cholera. In 2016, 27000 people were infected with cholera and 240 people died from the disease. Since 2010, more than 9000 people died in Haiti due to the epidemic.[36] This information shows that different kinds of diseases are spreading even more with the natural disasters. Moreover, Hurricane Matthew destroyed up to 80 percent of the crops in the area leaving people without food, clean water and their homes. Nature cannot be controlled. Nevertheless, it is in our power to provide help to countries that are in need.

Critical food situation in Africa

A particularly situation of food shortage exists in Africa. According to specialists, its current food situation has been assessed as critical. Food crisis on the continent is becoming prolonged, chronic due to the extremely low incomes of the majority of the population. According to the World Bank, the share of African population living in poverty (under $1,90 a day) has decreased from 57 percent to 43percent, however, due to increase in population, the number of people living in poverty has increased and amounts in 389 million people.[37] High growth rates of population, natural disasters, and harmful economic systems have a negative influence on per capita income causing hunger and poverty among people.[38]

Theories of Malthus and Boserup

According to an English scholar and cleric Thomas Robert Malthus, uncontrolled population growth can outgrow its resources, leading to major problems. Figure 1 shows the Malthus’ Basic Theory where population is increasing exponentially and resources increase arithmetically. In some time in the future, this property will lead to a crisis where people will be fighting for food while famine will expand and wars will begin.

malthusian_theory_of_population_growth.png

Figure 1[39]

Malthus was the first who intuitively felt and predicted that population is going to increase sufficiently and its needs and wants are going to expand which will require the involvement into operation big volumes of natural resources, which are in limited quantity on Earth. The analysis of dependence of two key variables – the production of material goods and population – are important for the society.

Contrary to this theory, another philosophy made by Ester Boserup, a Danish economist, states, “necessity is the mother of invention”.[40] According to her theory, people will always find new ways of producing food for population.

slide_5.jpg

Figure 2[41]

As we can see from the Figure 2 above, Boserup believes that with the use of technologies, green manufacturing and other advances in agricultural sphere, people will not have to worry about population increase and avoid potential crisis.

In history, only in the late middle age did food shortage in the European countries begin to wane: trade development, improvement of transportation, the establishment of grain storage – all of that helped the population in the lean years and partly saved people from premature death.

Improvements in fighting hunger

An ideal example of a country that did a huge improvement in food security in the recent years is Brazil. A decade ago, the country was among the poorest nations in the world. Currently, Brazil has a very successful school-feeding program helping more than 43 million children access daily meals.[42] In the period between 2001 and 2008, Brazil also made a significant improvement in reducing the number of people living in poverty by ensuring higher per capita income. According to Figure 3 below, the First Millennium Development Goal (MDG) was achieved already by 2008.[43]

Screen Shot 2016-12-19 at 16.11.18.png

Figure 3[44]

Over the last decade, the Latin American country has reduced the number of hungry people by one third, pulling out of extreme poverty over 20 million people and reducing the level of depletion of undernourished by 25 percent.[45] Furthermore, former president of Brazil Luiz Inácio Lula da Silva in the beginning of his rule in 2003 implemented a program called “Zero Hunger” aiming at eradicating hunger, ensuring the right quality of food and its’ security.[46] Thanks to this program, the poor citizens could get access to food while their small family farms received support from the government to produce food thus increasing the incomes of rural households.

Other countries have also recorded significant improvements in poverty eradication. China, for example, was once the country receiving food aid from the WFP (World Food Program). In the recent years, the country has reduced poverty numbers from 60 percent to 16 percent; indicating that more than 400 million people are out of poverty now.[47] As it stands, the country is among those that provide food and humanitarian help to different states that are in need. In 2005, China became the third largest food aid donor in the world helping countries such as Democratic People’s Republic of Korea, Liberia, Guinea Bissau, Sri Lanka and a number of other countries.[48] Developing countries are big suppliers of agricultural products and at the same time, they have highest numbers of hunger and malnutrition in the society. Companies should address this problem by ensuring that the local population of those countries receives adeqaute food products first before the agriculture products are exported abroad.

How Companies have Battled Hunger

One of the ways in which companies have attempted to tackle the food scarcity problem is by undertaking various corporate social responsibilities (CSR) activities that ensure a constant supply of food to these areas. Some of the CSR activities that are used to remedy the food insecurity situation in hunger-stricken place as mentioned earlier include enforcing labor rights, ensuring favorable working conditions and providing a sustainable supply chain among other strategies. Nonetheless, to tackle the food insecurity threat entirely, these companies have formulated precise methodologies. The enterprises that deal with food in developed countries have well-devised strategies to ensure that their efforts as directly felt by the hunger-stricken regions for effectiveness.

More specifically, some companies including Tyson and McDonalds have actively participated in fighting against food insecurity by availing the excess food to the regions that are stricken with hunger. The surplus food that is produced by these companies is collected, packaged and transported to Africa and other third world countries where it is given to citizens that are in dire need of food. Since some of the foods are deemed to spoil at a quick rate, these companies have found it vital to unite and corporate with the other non-governmental organization (NGOs) as well charity organizations for effectiveness in the transportation of food. This has been attained through collaborating with courier companies to provide fast transport mode hunger-stricken regions. In addition, well-articulated coordination is conducted between the charity organizations that operate within the food scarcity areas, to access the areas that are face severe food insecurity.

Moreover, some organizations that deal with food production have united to provide food that is sold in Africa among other areas, at lower costs. Well-wishers sponsor the food provided by these companies and other partners that are interested. The organizations also request for volunteers who prepare the meals to lower the cost associated with the activities. The food is then be distributed to areas with food insecurity where it is availed at significantly low prices. In some regions where food insecurity is high, the citizens have money but lack stores where they can find sustaining quantities of food. The money collected from the sales of food is used in the purchase of other ingredients that are be used in the preparations of the other subsequent meals.

Other companies, such as Starbucks participate in the efforts to fight food insecurity through the donation of resources that are used in the supply of food. The financial resources that are provided by these organizations are utilized in buying foods and catering for the transport costs for the meals to the hunger-stricken regions. The additional meals that these companies avail are also incorporated into the list of foods that are packaged and distributed to various. The financial resources have also been a channel to support technological inventions that are aimed to promote the production of food in Africa and other third world countries. Areas that face starvation due to drought have been offered significant amounts of funds to invest in technologies that will enable them to produce sustainable food.

Nevertheless, it is important to note that, organizations such as Walmart and Tesco have recently played an enormous role in the formation of a flawless chain supply to places that are faced with chronic hunger situations. These countries exhibit vast experience in the chain supply industry. Consequently, these organizations have been able to employ the required resources to ensure that food distributed to various regions reach their destinations and serve the rightful purpose.[49]

The Motivation of Corporates to Fight Hunger

The motivation of companies such as Starbucks and Ben and Jerry to donate food comes from the need to oversee the well-being of the society. The sentiment drives most companies that are concerned with the donation of food that it is the social responsibility to see that people from other countries to do not starve yet they have more than enough.[50] These organizations feel that it is unfair other people to face starvation while they throw away the excess food.

The other motivation is to create awareness of the situations of food scarcity in the world. Many individuals, especially in developed countries, are not acutely aware of the food insecurity issue, as most of them have never been faced with the problem.[51] To them, the problem is a concept that does not exist in the reality of their world. As a result, they are bound to waste food instead of saving it and distributing them to the needy. Thus, companies that donate food do so with the motivation that they will create awareness regarding food insecurity in developed countries. Gundersen, Kreider, and Pepper provide an illustration of the how a group of Harvard University students gathers leftover foods and distributes them to needy individuals in Boston.[52] The group collects the leftovers from students all around the campus and avails the food to street children in Boston. The motivation of team is to create a complete awareness regarding the food insecurity issues and sensitive the local on the importance of preserving food and giving it to the needy.

Nwankwo adds that another key motivation for companies that donate food is the feeling they obtain from doing so.[53] A majority of the organizations that deal with food insecurity issues are non-profitable enterprises. Their primary intention of availing food to the needy is not to amass wealth but rather an act of good faith. These organizations truly feel atrocities that face individuals due to food insecurity issues, and thus they are feel compelled to remedy the situation. The good feeling that these companies get from helping the individuals faced by hunger motivates them to continue supply food hunger-stricken regions. They observe this process as a way to recycle waste food.

Fighting Food Scarcity in the Future

To curb the problem of food scarcity and hunger in the future, agricultural productivity should be increased.[54] Third world countries ought to put in place well laid out policies aimed towards increasing agricultural output. These policies have to ensure farmers are provided with the rights inputs, infrastructure, and motivation that will ultimately translate to a boost in productivity. These countries, for instance, need to offer farming education to their farmers on the best agricultural practices that would double their productivity. Most farmers produce way below their potential because of ignorance of modern techniques and lack of the right farm inputs. Farmer empowerment campaigns need to be executed in third world countries to change this trend into a more productive system that will reduce food scarcity and hunger. Proper infrastructure will play a significant role reducing hunger levels as a lot of agricultural food perishes to waste due to delayed transport from inaccessible areas.

In addition, poverty levels should be reduced to eliminate the threat of insecurity completely. According to Aluchna, Maria, and Samuel, Economic empowerment and advancement are the cornerstones to hunger eradication and reduction of food scarcity.[55] Economically stable nations can quickly combat the problem of food scarcity. Open markets, economic liberation and more trade create a chain of food flow that ensures there is no shortage. Furthermore, economically empowered farmers will be able to afford quality farming tools and farm inputs that will translate to improved yields hence hunger reduction. The economically empowered states will also be capable of importing food supplements for its citizens hence combating the food scarcity crisis. Citizen too will be able to afford food and will not suffer from malnutrition.

An increase of food aid to third world countries in the future will reduce hunger and food scarcity in these countries. A great percentage of the starving citizens accessing food to survive; hence the reduction of food insecurity. As Caprihan states, the improvement in food aids will ensure that adequate resources penetrate profoundly to the hunger-stricken areas.[56] Organizations that deal with logistics of aid collection, distribution and transportation could draft strategies to effect an increase in food aids.

Trade barriers should be broken down to curb food scarcity and hunger. Trade barriers in our contemporary times hinder eradication of hunger and food scarcity as such platforms control food flow through restricting exports and imports. Various nations will have to revise their policies on food Imports and exports to remove barriers that propagate food scarcity and hunger problems. According to Lambers, the United States and the European Union have been unfair competitors in the agricultural markets.[57] Breaking down of trading barriers will ensure that third world country farmers compete fairly against such nations as the U.S and the E.U. Through this healthy competition, the levels of poverty and food scarcity will be reduced immensely.

Additionally, dynamic campaigns against the consumption of meat will help reduce food scarcity in areas affected by hunger. Residents will be educated on the negatives associated with meat consumption. For instance, it requires about 7 pounds of corn to generate one 1 pound of beef, 2.6pound of corn to generate 1 pound of chicken and 6.5 pounds of corn to generate 1 pound of pork. This statistics depicts the huge quantities food that is lost in the process of converting corn to meat. This is alarming as Lambers alludes that 40% of grain is used to feed livestock and fish today.[58]

World Food Programme

The World Food Programme is a humanitarian organization that focuses on fighting hunger worldwide, improving nutrition and ensuring stability in societies that are in need by providing food assistance and other services for humanitarian community. In order to achieve its goals WFP is working closely with governments, non-governmental organizations, UN agencies, international institutions and private sector. The private sector is represented by companies from a variety of industries including food sector. Companies such as PepsiCo, Unilever, Yum Brands Inc. collaborate with WFP to save lives and reduce hunger in the world.

PepsiCo and Zero Hunger mission

Involvement of companies in this issue is crucial because they have a significant impact on food industry. Companies in the food industry are not directly responsible for the world hunger and devastating conditions in some parts of the world but need to realize that they can play a big role and their actions can help improve the situation.

For example, PepsiCo is cooperating with WFP since 2008 and conducting a number of initiatives that help in achieving both company’s goals and WFP’s Zero Hunger mission. The company is providing help for chickpea farmers in Ethiopia by financing the development of the local-based chickpea production to improve availability and affordability of nutrition. Moreover, the PepsiCo Foundation is helping people in ongoing refugee crisis by offering relief aid to families and communities that are in dire need of basic requirements after natural disaster occurs. The organization assits these victims by providing food, financial help and employee contributions.

Why Companies Should be responsible for Fighting Hunger and Food Scarcity

Increased agricultural productivity is necessary for the elimination. Companies should help farmers within the community it is situated get better produce yields as the wellbeing of the community is both its responsibility and in its best interests. These firms can achieve through carrying farmer education programs in the communities. In addition, the companies need to ensure the farmers in their localities have the modern farming equipment and farm inputs. Should companies adopt this – hunger and food scarcity will drastically drop to insignificant levels.[59]

The reduction of poverty levels will also significantly contribute to the eradication of hunger and food shortages. Companies should play a key role in poverty alleviation by providing employment opportunities to the residents of the communities they are located within hunger regions. Aside from providing job opportunities, companies should also carry out economic empowerment campaigns through which they emancipate the masses on how to develop themselves to become economically stable. As Aluchna, Maria, and Samuel stipulate, several companies have not made economically empowering the society their responsibility.[60] Organizations need to make the communities’ welfares their own too while attempting to curb hunger and food scarcity problems in the future.

Companies also need to increase food aids to the communities they are located in. This will ensure that the communities in which the companies are located does not suffer from malnutrition since a company only thrives better when the neighboring community well taken care of too. The organizations have the financial ability to offer food aids to their communities. Should companies increase their levels of food aids and those that don’t give food aids also start allocating funds in their budgets for the same, then the levels of hunger and food scarcity will be greatly reduced. In the forefront on this measure are Ben and Jerry companies, who have increased the budget allocated for food aids to Africa and Latin America.[61]

Companies need to fight relentlessly against unhealthy trade barriers. Companies should champion for legislations to drop unhealthy trade barriers that hinder proper circulation of the food chain across the world. This is crucial in eradication poverty and is a philanthropic and legal corporate responsibility of all companies.[62] Business enterprises need to fight for the wellbeing of the society as a whole and a society where food circulates to everyone of a well-off society. McDonalds and Tesco, for instance, champion for the abandonment of trade barriers that hurt humanity for the benefit of a minority.

Finally, companies must join the campaign towards the reduction of meat consumption. Companies must sensitize people on the benefits of agricultural foods. The organizations also need to produce less of meat foods and more of vegetable food; this will ensure availability of more food that will, in turn, reduce food scarcity.

Natural environmental protection

Impact of human beings on environment

Numerous people on the planet have ponderable impacts on nature. Nature is our habitat and a source of necessary resources needed for our existence. Nowadays, the human impact is of planetary scale. The planet has changed that much that it would not be possible to recognize it hundreds years ago. In the places that used to be deserts appeared oases, instead of steppes and plains are industrial complexes. These changes are matters of pride to humanity, but for the nature, these modifications are harmful. Many human actions have led to the extinction of hundreds of species of plants and animals. In nature, everything is interconnected and these disappearances led to other events. One of the concrete examples of irresponsible behavior towards nature is Deepwater Horizon. In the accident in the Gulf of Mexico was spilled nearly five million barrels of oil.[63] On the surface of the water formed a huge oil slick, soon reached the coast of the United States.

The incident on the Deepwater Horizon was recognized as the largest environmental catastrophe in the history of the country. The accident at the oil platform in the Gulf of Mexico and the oil leak has big influence on the nature as the Chernobyl in 1986. The huge catastrophes, which are human-made, possess significant impacts on our nature. The amount of fish has sufficiently decreased in the Gulf of Mexico as well as number of other animals died. Individuals who harm the environment will need to pay a big price for that in the future unless appropriate measures are taken. The development of science and technologies allows people to stick to the new methods of production, to use resources economically, to restore the destroyed human ecosystems. Many civil organizations are promoting these methods to attract the attention of the public. Nonetheless, there are businesspersons, entrepreneurs, government officials who own large companies and continue to use technologies that destroy environment.

Economic and political influence on the food market

Many developing countries are forced to seek help from the international organizations or individual economically developed countries of the West and the East. This observation has led to competition in the global food market that worsens international relations and the dependence on foreign capital. The higher demand for food with the low supply will increase prices. This process may have a negative impact on the global economy and politics. Former Director-General of the Food and Agriculture Organization, Jacques Diouf commented that due to rising food prices and the global economic crisis, about a billion people is on the verge of starvation. According to FAO, our planet is able to provide all their inhabitants with sufficient food until 2050. However, this does not mean that everyone has access to food.[64] Moreover, the situation is getting complicated with the international military and political, religious and other armed conflicts.

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Natural disasters and food industry

Food situation is getting worse with the frequent natural disasters such as droughts, floods, locust attacks, earthquakes and due to the general degradation of the natural environment. Natural disasters influence food industry in many ways that people do not consider. Floods, droughts, changes in temperature and freezing in spring or in autumn, drastically influence the food industry. Weather conditions might affect the amount of the food that will be delivered to the market. For example, if flood destroys the wheat, there will be scarcity of flour, therefore the price of the flour and products that contain flour will raise, and it will influence not only the food companies but also the economy of the country itself. Such a change affects the conduction of domestic and foreign trade. Every time nature strikes, it influences the operation of the trade market.

Environmental responsibility of companies

The food industry has a huge impact on the environment including water and soil pollution, deforestation, food waste, food packaging. Due to this reason, stakeholders of the food companies require them to address the environmental issue in their processes. Food retailers must not only provide customers with environmentally friendly products, but also show them that they take care of the environment itself. As practice shows, many leading food companies such as Starbucks, McDonalds and Pizza Hut have adopted programs to reduce its environmental impact by reducing energy and water consumption, building greener stores, and improve their food packaging by using more recycling materials.[65] Both producers and consumers observe that the impact of company’s activities on environment is increasing. Implementation of the concept of corporate social and environmental responsibility is beneficial for producers. Firstly, it gives new opportunities for businesses to promote their goods and services and attract potential customers. Consumers tend to choose more responsible business over less responsible one. They pay attention to the principles of sustainable development of a company. Secondly, CSR also provides companies with the economic benefits due to more efficient use of resources such as water, electricity, and gas. Moreover, introduction of new production technologies, development of new lines of products and maintenance of positive working environment are another benefits companies may face. Environmentally responsible companies, particularly retailers should be required to have the organization of separate waste collection and its further export for processing. The collection and safe disposal of hazardous wastes such as batteries, accumulators, and other technological devices should also be mandatory. In addition to reducing its own environmental impact, environmentally responsible retailers also pay great attention to communication with customers, informing them about the environmental policy of the company and encouraging them to reduce their negative impact on the environment. Thus, environmental responsibility in the food retail sector goes through different aspects of the enterprise. It involves ecological behavior of its suppliers, transportation of the products, storage and disposal of the waste. Considering environmental conditions occurring in the world such as droughts, floods, earthquakes and others, environmental responsibility must become an integral part of the company’s strategy. Various companies, particularly in the food industry, conduct their business operations considering the environmental impact they might have.

Walmart

Walmart is the world’s largest retailing corporation operating in 28 countries with more than 11000 stores. It is also the world’s largest private employer with 2,3 million employees. Since its foundation in 1962, the company has been focusing on providing more goods for less money. Corporate social and environmental responsibility has become an integral part of the overall business strategy of the company. Walmart takes steps in sustainable development in several aspects: supporting local producers and farmers, reducing waste, switching to alternative energy sources, and expanding the range of products among other strategies. As CEO of Walmart, Doug McMillon stated in the 2016 Global Responsibility Report that the company has made a great job in achieving three main goals set in 2005: reducing waste to minimum, 100% usage of renewable energy and sell products that sustain people and the environment. [66]

On its way to global responsibility, company has been using the approach of shared values, meaning that they cooperate with their suppliers, other businesses and organizations in order to achieve a common goal through the cooperative efforts. One of the most notable achievements of the company is the reduction of waste generated. The institution achieves these results by reducing the amount of waste generated in their own operations, improving packaging and design of products, and expanding the recycling process through infrastructure facilities and education programs.

Another aspect that Walmart pays considerable attention is the efficiency of logistics, particularly the amount of kilometers trucks have to make to deliver products.

In addition to the initiatives aimed at protecting the environment, Walmart continues to work with local communities, supporting local small and medium-sized farms. By including greater amounts of domestic products on their shelves, the company promotes sustainable agriculture in the region and more active involvement of local farmers in economic life.

Tesco

Tesco is the third largest revenue retail chain in the world (after Walmart and French retailer Carrefour) as well as the second largest in terms of profit. Tesco PLC is a British Corporation with stores in 12 countries in Europe, Asia and North America. The company has almost half a million employees worldwide.

Tesco has a policy of sustainable development in three main directions: participation in the issue of global climate change by reducing greenhouse gas emissions, the reduction of waste, and decent packaging and recycling activities.

The policy Tesco in the fight against climate change is the simultaneous interaction with suppliers, employees and customers. The company reduces its own greenhouse gas emissions through more use of energy efficient equipment and the development of alternative energy sources, including solar panels, wind power. The point of the plan to reduce emissions and improve the efficiency of transportation. For example, the company has effectively managed more than 42% of filling the trucks to the brim, which is aimed at reducing the required number of trips thereby preventing the emission of greenhouse gases into the atmosphere. The company also increases the number of two-story trucks, which also reduces the amount of traffic. The reduction of the total length of completed road transport distances takes place and by careful route planning. In addition, where possible, the company tries to use an alternative of road transport that is the railway carrier.

Other important points of the environmental policy Tesco are the problems of education and recycling. The company is constantly looking for new possibilities of cooperation with companies dealing with waste recycling. The company has also set a goal to take into processing up to 95% waste in the future. In 2009, Tesco took first place for the recycling of cardboard among British companies. At the same time, the company reduces the consumption of disposable containers, for example, it uses reusable plastic pallets for transportation of products instead of disposable cardboard.

To measure progress in the area of corporate responsibility report, Tesco corporate responsibility has been linked with the KPIs (key performance indicators – KPI). The indicators include both the social aspects of the company such as donations to charities, active participation in professional training, and informing customers about the healthy food as well as environmental aspects such as reduction of carbon dioxide emissions and the share of recycled waste. The annual reviews of these indicators give a more complete picture about the company’s achievements regarding the social and environmental responsibilities, and allow the institution to set new goals for the next year.

Food waste

Crucial problem of food waste

While some countries suffer from hunger and malnutrition, the developed nations strive to achieve harmonious diets and some are even forced to “fight” with food surplus. Every year, the developed countries throw away more than billion tons of food that could be used save so many people’s lives. People buy more food than they consume and restaurants throw away dishes left at the end of the day. The problem of wasting food resources is aggravating annually. In the developed world, hundreds of thousands of tons of food are manufactured and thrown in the trash, yet in third world countries, people continue to die of hunger.

However, the unequal distribution of food is not just hunger. Food waste accelerates global climate change, which, again, affects the most vulnerable segments of the population. Thus, food waste is considered a crucial problem. According to Food and Agriculture Organization of the United Nations, food waste is considered “food appropriate for human consumption being discarded, whether or not after it is kept beyond its expiry date or left to spoil”.[67]  Food waste occurs on all stages of supply chain from the initial food production to the end household consumption. Wholesalers and retailers have a significant market share in the food sector, and therefore, they have they can largely influence the production of food waste. Moreover, these companies have a big impact on consumers; by using different marketing strategies, companies can influence purchasing and consumption decisions of customers. Retailers and wholesalers are among those who are crucial in pursuit of adopting corporate social responsibility measures, one of which is reducing food waste. According to World Food Programme and the Food and Agriculture Organization, more than 30% of the food is wasted around the world, which is the outcome of oversupply in the food market, and purchasing and eating habits of consumers among other reasons. Furthermore, almost one third of food is being spoiled, squandered or wasted even before it gets to the end customer. Due to these reasons, maintaining sustainable food supply chain is essential in order to reduce the amount of food wasted and make sure that customers do receive food products and receive them in good quality. Nonetheless, reducing food waste is beneficial not only for end consumers but for the world economy as well. Food waste on a global scale causes environmental troubles and thus economic loss of billions of dollars.[68] Because of the food wasted, people misuse resources such as water, land, energy, and capital, produce greenhouse gas emissions that cause global climate changes.

How to reduce food waste

In order to solve the problem of food scarcity, the world does not need any scientific breakthroughs or revolutionary discoveries. The knowledge, tools and approaches that it has today in addition to political involvement can solve the problem. Food scarcity affects majority of the world population should be solved with the help of the entire society. As the Director-General of FAO José Graziano da Silva responded in one of the interviews, “The world faces many challenges that we can only overcome if we work together”.[69] The most outstanding and powerful actors in the communities are companies and entrepreneurs, who promote social, economic, and environmental stability in the society.[70] In order to fight with the food waste companies need to invest and improve their operational processes and manage food waste properly. There needs to be a functional relationship between corporations and society. In the end of the day, we all live in the same world.

Supply chain responsibility

Corporations should be involved in CSR activities alongside with supply chain responsibilities, because each party is dependent on the other one. Choosing a good, trusted and responsible supplier is crucial to ensure product quality, availability and affordability. In the food industry, companies should choose suppliers that produce safe and healthy products, operate within the biological limits of natural resources, have safe and hygiene working environment, high standards of environmental performance and ensure animal welfare. Supply chain responsibility can be used as a tool to help spread CSR initiatives beyond one single firm and act as a multiplier effect for social responsibility.[71] Companies should not separate themselves from their suppliers, but set up standards and rules that would represent company’s values. As was already mentioned in the paper, food industry is of great importance to the society and to the state’s economy. There is a need for deeper research in the field and support of implementation of supply chain CSR. The methods that we use in the production and the consumption of food have a significant impact on the environment and society. The food that human beings consume on a daily basis directly affects our health and well-being. The CSR in the food industry has its issues and risks. For example, there are risks associated with the availability of raw materials and their cost. Due to the climate change, companies need to understand the impact of adverse atmospheric conditions to food production and the industry as a whole. In addition, companies have to pay attention to efficient utilization of resources. Responsible business is a successful enterprise. Corporate social responsibility has a positive impact on the reputation and success of the business; it helps to reduce costs associated through the efficient use of resources. Another benefit of implementing corporate social responsibility is improved well-being of employees, increased productivity and customer loyalty.[72]

Corporate social responsibility in the supply chain

Although the history of CSR is quite long, applications in the supply chain emerged in the 1990s.[73] More companies today are under pressure to increase involvement in CSR practices through the whole supply chain. Firms do not have a legal responsibility concerning environmental activities of their suppliers; however, due to increased environmental consciousness of the customers, conditions might change. Firms are expected to be fully accountable for their business operations.[74]

Food loss is considered as a proportion of food that is lost in period between processes of harvest and the time when products are delivered to the consumer. A high proportion of food that is lost during processing, production, transportation and storage is often an indication of significant structural problems within the supply chain. Considering sustainable food supply chain, food retailers are important actors that can enforce better practices both in production and consumption processes.[75] Sustainability in supply chain means improving sustainability implementation procedures beginning with farmers and concluding with the end customers. Those include food production, transportation, consumption, and the internal operations that take place in the stores.[76] Two concepts exist today that generalize the elements of supply chain CSR: Logistics Social Responsibility (LSR) and Purchasing Social Responsibility (PSR).[77]

Starbucks and McDonalds as examples of sustainable supply chains

The well-renowned company, Starbucks, has very strong LSR programs. The organization established “Preferred Supplier Program, which rewards suppliers for both environmentally and socially responsible practices”.[78] Furthermore, Starbucks is using third party auditors to verify its coffee suppliers; they should comply with Starbucks’ Coffee and Farmer Equity (C.A.F.E.).[79] C.A.F.E. is a set of sustainability standards covering such areas as quality, economic accountability and transparency, social responsibility and environmental leadership.[80] It is true that companies can do good performances and at the same time be successful in business. After all, any good deed will pay off in the future.

Another example is McDonalds, which recognizes its responsibility to protect and preserve the environment by establishing sustainable sourcing policy both for food products and packaging. The company is working closely with its suppliers to improve the processes in the supply chain in a continuous manner. Moreover, McDonalds has educating and training programs for its employees on sustainable practices.[81] As mentioned earlier, restaurants produce a lot of food that goes to waste. To solve this problem McDonalds uses efficient stock control, ordering and production systems to reduce the amount of food wasted.[82] Innovation and technologies are key tools in implementing CSR and focusing on sustainability. Unfortunately, companies such as Starbucks and McDonalds with their sustainable supply chain programs are among the exceptions. Implementing CSR initiatives in supply chain has not become a standard rule yet.

US food supply chain

In the United States, food supply chain is very complex consisting of hundreds of thousands of companies that deliver food to the end customer. Growers usually sell the products to food processing companies and afterwards sent to wholesalers, distributors and brokers who avail the commodity to retailers and consumers. However, sometimes supply chain can be shorter skipping distributers and brokers and going directly to the customer. There is no certain supply chain path for a particular food product; it depends on the nature, size of the product and the power of companies in the supply chain. Companies in the food industry are facing a variety of CSR issues. The level of farmers’ wages, price fixing for suppliers, animal welfare, overfishing and use of antibiotics, pesticides and other chemicals are the reasons why CSR is gaining more weight in the food supply chain. There could be detected eight dimensions in the food supply chain: animal welfare, biotechnology, community, environment, financial practices, health and safety, labor, and procurement.[83]

Considering the first dimension, animal welfare, certain regulations were adopted in the US and the EU in order to improve the conditions in the industry such as Humane Slaughter Act and European Convention for the Protection of Animals that is kept for Farming Purposes. However, these rules continue to be violated due to implementation of more intensified animal farming, which questions the animal welfare practices despite that it reduces the operation costs for companies. Consequently, food retailers today pay more attention to animal welfare practices of the suppliers that they choose. Moreover, since consumers are important stakeholders, it is important to provide them with the information about animal welfare practices of companies.

Barriers to sustainable supply chain

One of the barriers on the way to sustainable supply chain is lack of financial resources. Implementation of sustainability strategies is very costly and businesses usually are very reluctant to invest in it. Since there is no solid evidence that CSR activities can payoff to the company, a good number of business managers have decided not to invest in costly CSR programs, but rather use an easier and safer passive CSR approach that requires less effort and fulfills basic societal requirements and enhances shareholder values.[84] The other reason why companies hesitate to invest in CSR is they do not know how stakeholders perceive passive and proactive approaches. These institutions are not aware of the extent they should show their commitment to social, economic and environmental sustainability. Companies by spending money on environmental or other issues want to be sure that this will benefit them. The management of the companies needs to understand that the world we live in today is facing a number of challenges and only joint efforts can help to achieve results.

Role of governments in CSR

Governments are among those forces that can make companies be socially responsible and make them implement sustainability strategies for their businesses. This is done through the legislation, international regulations and conventions. For example, the UN Declaration of human rights, International Labor Organization conventions, EU Sustainable Development Strategy and other programs. The role of the government in this issue is crucial, as policymakers should work together with the businesses to provide a clear vision of sustainability in the sector and develop an action plan aimed at improvement of the processes in the supply chains.

However, actions of the governments may contradict the international provisions of free trade. Setting certain requirements could be seen as a tool of protectionism, allowing local businesses to keep their dominant position in the market and obtaining strategic trade benefits. For instance, “‘eco-smart food choices’ guidelines developed by the Swedish Food Authority that aim to reduce environmental impacts of food by advocating local food sourcing have been forbidden by the European Commission as impeding free market trade.” [85] Although governments set certain targets and goals in environmental and social sphere that they need to achieve, there are other institutions such as the European Union with the free trade, that contradict to the actions of member states on the way to more environmentally friendly activities.

Among activities that could be done in the supply chain in order to improve it is reduction of product packaging include the improvement of food logistics and the reduction of waste of fresh food when being transported from the farmer to the consumer. By implementing sustainability strategies and becoming eco-efficient, companies have a chance to cut operational costs and increase financial returns of the business. This observation could, in turn, attract more investors, make the brand name and reputation of the business stronger and increase competitive advantage and profitability.

Practical part. Interviewing

The company chosen for the interview is the local Czech company Lifefood. This company produces raw food.

  1. You are a big company focusing on production and distribution of raw food. Is there a difference between raw and organic foods?

Yes, there are several differences. First is the certification process. There are detailed requirements from the certification agencies to be able to use “organic” logo. A company cannot use organic logo without any certification agency.

When stating “raw,” there is no strict requirement from any agency and anyone can use this quality freely – similar to natural.

Then, every company gives its own definition to what Raw is and is not. For Lifefood it means that the products are processed at low temperatures under 45 °C and so is the production of the ingredients we buy from our suppliers.

Some companies state “raw” on the packaging, keep their own production process at low temperatures and they buy the ingredients that were heated over 45 °C. From Lifefood perspective, this does not make sense – the reason for the limit of 45 °C is that many vitamins and enzymes will be destroyed with higher temperatures.

Lifefood carefully monitors all stages of production to ensure that no ingredient is ever subjected to temperatures above 45 °C. Lifefood´s production adheres to the strictest rules of raw and organic quality. All of our products are organic/BIO certified.

However, being a raw producer doesn´t mean you have to use organic ingredients.

  1. Is there a big market for raw foods in the country?

The potential of Czech raw food market is still growing and becoming mainstream taste. As Lifefood was the first company to bring raw food to Europe 11 years ago, we can see the raw vegan market quite well developed in our country compared to other European countries. When it comes to number of vegan restaurants and raw snack bars, we can see that Prague is more developed than most of the European capitals.

  1. Why do consumers choose your company?

One of the main reasons Lifefood products are so popular is the trust people have in the continual TOP quality of the products. Also wide range and variety of the products (energy bars, protein blends, raw crackers, chocolates, biscuits, chips, sweet snacks, breads).

Lifefood was first on the market to produce raw food, even at the time when this kind of diet was not so popular. For more than 10 years now, its employees have been constantly evolving and coming up with new products and supplements that are much appreciated by Lifefood customers.

The other reason why customers tend to come to our products even after tasting another brands is the outstanding taste of our products. The creation of new flavors takes our product development team a considerable amount of time – even months until the taste is perfect and balanced.

  1. Do you consider your company as socially responsible? If so, what kind of activities you perform?

Core business of Lifefood is based on being as much socially responsible as possible.

Lifefood cares not only about the highest standard of products, but also about production in an ecologically safe manner.

We are aiming for the minimal carbon footprint, that´s why our facilities are powered strictly by energy from the renewable sources (Nano Energies).

Additionally, we try our best to decrease the production of waste. Last year we have installed in cooperation with Kokoza at our facilities composter called Rocket, which is the biggest one of its kind in the Czech Republic.

We also care about packaging of our products. Most of them are recyclable and we are working on new compostable ones for our products. Employees are at Lifefood treated fairly and ethically. We work in the environment where inner and outer peace is a valued quality.

  1. Do you have a sustainable supply chain? Do you choose your suppliers according to some standard?

We practice social responsibility by supporting local producers and smaller farmers.

In the Czech Republic for example we take some ingredients from the local farmers community “Svobodný statek na soutoku,” which employs socially disabled people and is helping them to integrate into society.

Abroad, we try to acquire primary ingredients from smaller farmers and communities; by supporting them, we create social overlap in the region.

Before accepting new supplier, we do deep scrutiny of his company and production process.

Our CEO Tereza Havrlandova travels each year to meet some of the most important suppliers (in terms of quantities delivered) personally and to see if everything is according to Lifefood standards. The production must be strictly raw and organic.

  1. Do those CSR activities affect your business in a positive way? (financial performance)

A huge difference exits between companies that claim to be socially responsible and the ones that really are. The limit to recognize which companies mean the CSR seriously is the fact whether the CSR policy is discussed mainly in the marketing team or if the highest management takes CSR decisions directly in the daily operative production. As creating image of socially responsible is not that difficult (and especially not that costly) as being social responsible company.

We have benefited from our CSR activities as a result of targeting a group of customers who are consciously looking for healthy products made in the sustainable way.

The people and our company growth have definitely helped to build a respected brand and improve our financial performance, being a company that cares about the environment.

The markets where consumers are more environment-friendly oriented as Germany, France, Italy, Scandinavia have the biggest turnovers.

At the same time, sometimes it is a challenge to explain our customers the difference between CSR nice image company and the company that truly cares.

  1. How do you make sure that your customers are aware of your CSR activities?

More often, we inform our customers via our web page, social media and different events as trade shows or Raw Fest.

In addition, we are educating our distributors about our CSR activities, so that they can present Lifefood in their countries through different marketing channels as a sustainable company that cares.

Currently we are working on more marketing materials to promote our sustainable supply chain.

  1. Is there a tool or a method that you use to measure your performance in CSR?

Lifefood main motivation is the social responsibility itself. It is this idea that supported such an important growth. There are several reasons the products are organic, vegan, gluten-free and sugar-free. More specifically, the products are for the health aspect of using organic ingredients for individuals and the entire planet. Veganism has become trendier as worldwide animal mass production causes important changes in the environment. Gluten-free and sugar-free is a logical step in case we dig more into consequences caused by the consummation of the two.

In nonprofessional terms, CSR is not a politics of building nicely looking brand for Lifefood, it is its daily operation.

The only tool thanks to which we can see positive effect of our CSR activities on our business is the fact Lifefood exists and people, distributors and retail chains buy its products.

  1. Do you think CSR in the food sector is essential today or companies do it just to attract more customers?

We believe this is the only inevitable way to conduct business in the future in order to make life on Earth sustainable. Since “you are what you eat”, better business practices are essential especially in the food sector. We can see all over the world growing demand for products that are healthy and organic. Moreover, people start to care about what is behind the production and want to see all the connections behind their product.

There are companies that are “green washing” their customers in order to earn more money from a trend. For example, we have in past few years many competitors who are claiming that they are producing raw food, even though their ingredients are not raw at all.

We believe that in the future customers will not accept deceptive information from producers, therefore CSR which includes also being honest to the customers, will be essential in the future.

  1. How employees in your company are motivated? What benefits do they have?

Besides working in a very friendly environment with the beautiful natural surroundings, employees in our company are motivated by various benefits from common vegan lunches, group exercises, raw vegan parties our team has also flexible working time to special prices for Lifefood products. Special needs are discussed individually for high performers, as each of us needs something else to feel good.

Conclusion

In summary, numerous companies have joined the fight against hunger and food scarcity in the past few decades. The organizations have been able to invest a great deal of their time, efforts and other resources in the attempts to eliminate the threat of food scarcity in regions such as Africa, Haiti and the Latin America. It was found that these companies collect excessive foods, as well as unite with other charity organizations to avail food at low prices or free of charge in areas there food security threat has been found to be chronic. These firms go beyond the concept of profit maximization to oversee the well-being of the society. The motivation of these companies is the feeling that the organizations are socially responsible for a healthy population, the need to create awareness about food insecurity and the good sentiments associated with the process of donation. It was also found that strategies such the increment of agricultural production, reduce poverty levels, increasing food aid, breaking down trade barriers and reducing meat consumption can be used to tackle the problem of food insecurity in the future. Companies can help in improving agricultural production by giving residents appropriate education, creating more job opportunities, setting aside more funds for food aid and championing for the elimination of trade barriers. However, tackling food insecurity was found to begin with the conservation of our environment and the implementation of favorable economic and political principles. Reduction of food wastage and developing a reliable chain supply were other crucial aspects of fighting food scarcity issues. The government can also join in the CSR strategies to avail more financial resources that will break the barrier to unsustainable chain supply.

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2014, 24 June. “UN World Food Programme.” WFP. N.p., 24 June 2014. Web. 17 Dec. 2016.

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