Business of Edinburgh Morrisons Report PDF

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This the assignment on the CSR report of Morrisons....

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Investigate Morrison’s and explore specifically how Morrison’s management are tackling Corporate Responsibility operationally and strategically. Executive Summary This report analyses and discusses the operational and strategic actions adopted by Wm Morrison Supermarket plc based on their Corporate Social focuses in 2018, with main aims to better support local producers, to reduce plastic and to reduce food waste. They have initiated to better support local producers in order to fulfil customer needs, shorter supply chains, contribute to the UK's economy and ensure brand integrity and trust. Additionally the commitment to only use recyclable, reusable and compostable by 2025, raises several questions, while also commending the short term and long term actions continuously practiced to reduce their plastic usage. While also reaching milestones regarding food redistribution across the UK to local community groups and charities.

With the challenge of keeping the industry competitive, affordable, profitable and sustainable, Morrisons takes upon several initiatives such launching an expert-led farming programme, ‘For Farmers’, ‘Wonky Veg’ and encouraging their customers to promote less waste through social media, allowing for an interactive customer, producer relationship, where customers understand the meaning of taking action. In addition their partnerships and collaborations with the ‘Farmcare’, ‘Chippindale Foods’, ‘UN sustainable goals’, ‘WRAP’S UK plastics pact’, ‘FareShare’ allows for a stronger sense of corporate responsibility as they take the role as a partner and a citizen. Despite these actions, the effectiveness of these initiatives and collaborations can be maximised or minimised based on each individual team at the

Morrisons, as the management’s internal ethics can lead to results that amplify the benefits or undermine them.

Introduction Wm Morrison Supermarket plc, created in 1899, is the fourth largest chain of supermarkets in the United Kingdom, with around 490 stores, holding 15.6% share in UK’s grocery market 1. Their main business philosophy is to offer the “best value for money”. It is this competitive pricing, which resonates with the consumers and classifies them as being one of the UK's most desirable supermarkets. Over the years, firms have been encouraged to consider sustainable practices while constructing their business structure, in order to deliver sustainable economic, social and environmental benefits for all stakeholders within the society 2. This concept is known as the corporate social responsibility (CSR, which includes addressing various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development 3. In the past few years, this concept has been the forefront of many corporations to prove to consumers that they are not only about the profits and market share, but also about how they benefit the community at local, national and international levels. Often individuals interpret CSR as the business impact on the environment and charity, but it is about the impact the

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Morrisons PLC, Company History - Morrisons Corporate. Morrisons. Available at: https://www.morrisons-corporate.com/about-us/company-history/ [Accessed March 30, 2019]. 2 Anon, Definition of corporate social responsibility (CSR). Corporate Social Responsibility (Csr) Definition from Financial Times Lexicon. Available at: http://lexicon.ft.com/Term?term=corporate-social-responsibility--(CSR) [Accessed March 30, 2019]. 3 Notes

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business has on society, which is usually promoted within sections of their websites as a marketing tool.

With a consideration of the possible loopholes within the understanding of CSR for the firms, this report is constructed to provide an investigation on Morrisons’ management towards tackling Corporate Social Responsibility (CSR) operationally and strategically. This is successfully presented within this report through a close analysis of their operational and strategic actions to fulfil their three strategic aims for 2018; to better support local producers, to reduce plastic and to reduce food waste 4. Followed by a discussion of the effectiveness of their actions towards corporate social responsibility as one of UK’s leading supermarkets.

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Our approach Morrisons, 2018 . Wm Morrison Supermarkets PLC Annual Report 2017/18. Available at: https://www2.morrisons-corporate.com/cr/report-2018/#/approach [Accessed March 30, 2019].

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Analysis on the actions taken towards the Three Strategic Aims First Strategic Aim: To better support local producers One of Morrison’s strategic focus for 2018 was to better support local producers in order to fulfil customer needs, shorter supply chains, contribute of UK’s economy and ensure brand integrity and trust5.

Actions: Strategic Actions Taken until 2018 Morrisons is currently UK farming’s biggest customer as they buy animals and whole crops directly through the local farmers. In addition to this, they are the only British supermarket to own their own abattoirs and manufacturing facilities (Yurtoğlu, N., 2018). The vertical integration of these processes acts to shorten supply chain length, support the local farmers, and allows for more direct communication with farmers.

Furthermore, this domestic supply chain is something which they continually aim to build upon, and have thereupon done through their acquisition of ‘Farmcare’ and ‘Chippindale Foods’ (Yurtoğlu, N., 2018). The aim of the acquisition was to produce fresher food for customers and become more competitive with essential everyday items, all whilst lowering customer costs. In October 2015, Morrisons launched their ‘For Farmers’ range which since has resulted in an additional contribution of roughly £12m to local farmers 6. Through charging customers an extra 10 pence per litre of milk, the dedicated farmers are receiving gratification for the high welfare standards they are providing for the animals. The success of

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Yurtoğlu, N., 2018. Listening and Responding . Morrisons Supermarkets PLC CSR Report , 10(7), pp.241–264. Available at: https://www2.morrisons-corporate.com/cr/report-2018/static/downloads/Morrisons_CR_Report_2018.pdf [Accessed March 30, 2019]. 6 Morrisons. (2019). Morrisons. [online] Available at: https://www.morrisons-farming.com/how-we-work/milk-for-farmers/ [Accessed 24 Mar. 2019].

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the venture was so exceptional that they extended the range to cheese, and subsequently bacon.

It was in 2007 that Morrisons announced their commitment to sell only 100% fresh British beef, pork, lamb and chicken in their stores throughout the year 7. Through the 12-years since, they have risen to be the largest supermarket customer for British farmers, spending over £310m on products directly from British farmers and growers annually, they are contributing towards the UK's economy. This has resulted in being ranked 2nd for supporting British farmers in a customer insights survey in 2017/18 (Yurtoğlu, N., 2018).

Actions: Operational Long Term Plans While Morrison’s have achieved many things, they continue to strive for improvement. Their goals for the future include the collation of antibiotic use of farms and incorporating technology innovation into their farming technologies. The company’s focus appears to continue with improving sustainability, efficiency, and farmer’s welfare, based on which their ideas are promising although don’t have definite success confirmation.

Second Strategic Aim: Reduce Plastic Another one of Morrison’s strategic focus for the year of 2018 was to reduce plastic as they want to address the environmental issues created by the rise in plastic usage around the world. They have committed to only use recyclable, reusable and compostable by 2025 and in

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Yurtoğlu, N., 2018. Listening and Responding . Morrisons Suprrmarkets PLC CSR Report , 10(7), pp.241–264. Available at: https://www2.morrisons-corporate.com/cr/report-2018/static/downloads/Morrisons_CR_Report_2018.pdf [Accessed March 30, 2019].

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order to achieve this goal, they have taken short term and long term responsibilities and actions to continuously reduce their plastic usage 8.

Actions: Strategical Short Term Plans Executed in 2018 In the short term, they tackle more pressing issues, such as the reduction in the use black plastic packaging and Polyvinyl Chloride, while also working create solutions of using alternatives to problematic packaging materials which are unable to undergo kerbside recycling processes (Yurtoğlu, N., 2018).

They have also planned to work with their suppliers to ensure a reduction in the use of the multi-layer plastics, as long as the food safety won’t be jeopardized. Although, for now they are ensuring that an average of 30% recycled content will be used in their plastic packaging and have stopped using single use plastic bags in their stores (Yurtoğlu, N., 2018).

A major strategic action taken was the elimination of single use straws from their cafes. In addition, their beauty products such as stem ear cottons, the stem is now made out of paper instead of plastic.

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Yurtoğlu, N., 2018. Listening and Responding . Morrisons Suprrmarkets PLC CSR Report , 10(7), pp.241–264. Available at: https://www2.morrisons-corporate.com/cr/report-2018/static/downloads/Morrisons_CR_Report_2018.pdf [Accessed March 30, 2019].

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Actions: Operational Long Term Plans One of the most impactful actions taken by Morrison’s, is by aligning with the UN sustainable goals; “Sustainable cities and communities” and “Responsible consumption and production” (Yurtoğlu, N., 2018). Sustainability is a slow and long process, therefore through their various actions they plan to achieve these goals in the long run.

Furthermore, Morrison’s collaborated with WRAP’S UK plastics pact 9. This collaboration aims to get rid of needless plastics and difficult to recycle single use packaging by finding new innovative solutions such as coming up with more eco-friendly designs, or adapt reuse methods (Yurtoğlu, N., 2018). In the long run, this is a major issue that needs to be fixed within the production process. Although, the stakeholders believe the best way to solve the plastic issue is to get rid of plastic, Morrison’s argue that plastic packaging has many benefits for the quality and freshness of food, so they believe that a more effective solution is to find smarter ways to package and handle their food (Yurtoğlu, N., 2018).

Third Strategic Aim: Reduce food waste The third strategy that was Morrison’s focus for the year of 2018 was to reduce food waste, as food waste is one of the major contributors to climate change, with annually generating about 8% of the total human-caused greenhouse gas emissions 10The UK alone creates 10 million tonnes of food is wasted every year and being UK’s biggest producer of fresh food, they have implemented certain changes and committed to reduce food waste, as well as to educate consumers on their food waste

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WRAP, 2018. Together We Can. [online] Available at: < http://www.wrap.org.uk/content/the-uk-plastics-pact > [Accessed 28 March 2019]. 10 Yurtoğlu, N., 2018. Listening and Responding . Morrisons Suprrmarkets PLC CSR Report , 10(7), pp.241–264. Available at: https://www2.morrisons-corporate.com/cr/report-2018/static/downloads/Morrisons_CR_Report_2018.pdf [Accessed March 30, 2019].

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Actions: Strategic Plans Executed by 2018 Morrison’s policy towards reducing food surplus is that all stores should work with local groups to redistribute edible unsold food. They partnered with FareShare, a company that is dedicated to fighting hunger and tackling food waste, which redistributes food surplus to charities that turn it into meals. Last year over 3.4 million unsold food products were donated to local community groups as well £250,000 that was donated to food redistribution organisations by the Morrison’s foundation.

In 2018, Morrison’s introduced an initiative called ‘Wonky Veg’. They take certain fruits and vegetables that may not sell due to misshape or quality and sell for a discounted price (either in Wonky veg variety boxes or in individual packets).

In addition to this, Morrisons work with third party data analysts ‘Valpak Limited’ in order to accurately record the amount of waste in stores. Last year they recorded around 11 million tonnes of waste that was recorded as damaged or out of date.

Actions: Operational Long Term Plans Morrisons are also implementing changes in order to reduce both manufacturing waste and food surplus. They have invested £30 million in washing and packing technology and introduced water recycling systems on various sites.

Morrisons are reviewing on pack guidance for their own-brand products. They hope to reduce food waste even further by changing labelling from ‘display until’ to best ‘before dates’ and increase the visibility of products that can last longer when refrigerated.

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Additionally, they wish to advise customers on unnecessary food waste when possible via social media to encourage less waste and review their shelf life guidance policies

Discussion on the action taken towards the Three Strategic Aims: As most of the statistics within the analysis of each action is taken primarily from Morrison’s annual CSR report, most of the actions are often presented with a biased front. Additionally, the lack of information presented from a third point of view further has created limitations to completely understand the discuss the consequences of these actions.

First Strategic Aim: To better support local producers Morrison’s growing support to local producers has proven beneficial not only for the farmers, but also for the company’s efficiency and reputation. Their vertical integration allows them to have an advantageous understanding of the entire supply chain and through giving the customers exactly what they want, they build customer loyalty whilst having great transparency. Additionally, the financial statement is evidence that through the acquisition of manufacturing businesses they have closer relationships with farmers, lower production costs, and improved quality and consistency. Furthermore, reducing their transportation miles and therefore environmental impact. Morrison’s decision to source British is one which brings considerable success and cannot be criticized. Although these initiatives have been stated, hidden costs aren’t taken account of between shareholder expectations and the social requirements, which might have led to the rejection of other beneficial ideas based on high investment costs.

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Second Strategic Aim: Reduce Plastic Morrison’s management team is dedicated to helping the environment regarding reduction in plastic usage. Their CSR policies have aided them to practice actions which create change in Morrisons on a daily basis, enhancing sustainability through their business strategies. Although the long term operational actions such as aligning with the UN sustainable goals and collaborating with WRAP’S UK plastics pact, are actions that work in the long term, it allows the company to have a direction towards sustainability, encouraging other competitors such as Lidl and Tesco to join. Furthermore research and development to find alternatives of the black package is costly, but Morrisons still do it without raising the prices of their products so that they will always be affordable to all customers. Although the benefits of these initiatives are invisible in the short term, the long-term commitments of sustainability are promising for the stakeholders.

Third Strategic Aim: Reduce food waste Morrisons focus on reducing food waste is beneficial not only for local communities but also the environment. They are successfully reducing on-farm waste through their ‘Wonky’ veg initiative, as 500 tonnes are sold per week in Morrisons stores. Moreover, their partnership with FareShare has managed to redistribute 1,599 tonnes of surplus food that otherwise would have been wasted and over 3.4 million unsold food products have been donated to local community groups. Their mission to reduce food waste has positive effects on both local communities and the environment, which benefits Morrisons as a business as its reputation is more positive. Although around 11 million tonnes of waste were recorded by Morrisons last year, the waste was collected by contractors for recycling and reprocessing where possible. The corporate report shows they are taking steps in the right direction to

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reduce any avoidable waste in the future. Although these initiatives aim to convey the message to the customers, there remains a risk of the message being conveyed to the customers successfully, creating trade-offs between costs and social responsibility.

Conclusion While Morrisons have achieved many things, they continue to strive for improvement. Their goals for the future include the collation of antibiotic use of farms and incorporating technology innovation into their farming technologies. The company’s focus appears to continue with improving sustainability, efficiency, and farmer’s welfare, based on which their ideas are promising although don’t have definite success confirmation. In conclusion, through creating a meaningful corporate responsibility programme of several initiatives, collaborations and focus of internal management ethics, they ensure transparency amongst their stakeholder and customers, adding value to their business which is beyond just the idea of being marketed as a positive firm.

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Bibliography Anon, Definition of corporate social responsibility (CSR). Corporate Social Responsibility (Csr) Definition from Financial Times Lexicon. Available at: http://lexicon.ft.com/Term?term=corporate-social-responsibility--(CSR) [Accessed March 30, 2019]. Anon, 2019. Morrisons. Wikipedia. Available at: https://en.wikipedia.org/wiki/Morrisons [Accessed March 30, 2019]. Morrisons PLC, Company History - Morrisons Corporate. Morrisons. Available at: https://www.morrisons-corporate.com/about-us/company-history/ [Accessed March 30, 2019]. Yurtoğlu, N., 2018. Listening and Responding . Morrisons Suprrmarkets PLC CSR Report , 10(7), pp.241–264. Available at: https://www2.morrisons-corporate.com/cr/report-2018/static/downloads/Morrisons_CR_Rep ort_2018.pdf [Accessed March 30, 2019]. Our approach Morrisons, 2018 . Wm Morrison Supermarkets PLC Annual Report 2017/18. Available at: https://www2.morrisons-corporate.com/cr/report-2018/#/approach [Accessed March 30, 2019]. House of Commons, 2017: Enviromental, Food and Rural Affairs Commitee. Available at: https://publications.parliament.uk/pa/cm201617/cmselect/cmenvfru/429/429.pdf [Accessed March 29, 2019]. World Wildlife Fund, n.d. Fight climate change by preventing food waste. WWF. Available at: https://www.worldwildlife.org/stories/fight-climate-change-by-preventing-food-waste [Accessed March 29, 2019]. Addy, R. (2019). Morrisons reaps rewards of simplifying manufacturing base. [online] foodmanufacture.co.uk. Available at: https://www.foodmanufacture.co.uk/Article/2018/03/14/Supermarket-reaps-rewards-of-simpl ifying-manufacturing [Accessed 28 Mar. 2019]. Morrisons. (2019). Morrisons. [online] Available at: https://www.morrisons-farming.com/how-we-work/milk-for-farmers/ [Accessed 24 Mar. 2019]. Ridler, J. (2019). Morrisons adds 200 local suppliers to supply chain. [online] foodmanufacture.co.uk. Available at: https://www.foodmanufacture.co.uk/Article/2018/03/14/Local-food-producers-join-Morrison s-supply-chain [Accessed 26 Mar. 2019]

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