Challenges for Sustainability and Corporate Responsibility in the Food Industry

Corporations across the world are struggling because of a new challenge that is meeting the requirement of the current generation without compromising the ability to meet the requirement of future generation.  It is the responsibility of the organizations to take care of the impact of their actions on the society and community. In order to do so the organizations adopt various sustainability principles and integrate corporate social responsibilities with their business model. Corporate social responsibility is considered as a strategy that helps the companies to contribute to societal goals and development of the society and community.   Sustainability includes business activities that are voluntary and demonstrates the inclusion of environmental and social concerns in operations of business and stakeholder’s interaction. Sustainability and corporate responsibility is therefore a prominent feature of the business and society literature and also includes business ethics (Bowie,2017).

To enhance and understand the concept of sustainability and corporate social responsibility, food industry is chosen and in that different firms are analysed that revised their long and short term goals and their respond to challenges of sustainability. CSR strategy is integrated to whole business rather than selective areas, as CSR activities in food industry can leads to many benefits such as risk management, competitive advantage and avoidance of cost (Hartmann, 2011).  This report consists of key challenges in relation to sustainable business and corporate responsibility in food industry. Further, a detailed explanation is given by analysing different firms and businesses in food industry about the best practice. At last, recommendations are given to firms that operate in the food industry taking into account global considerations related to sustainability and corporate responsibility.

Corporate social responsibility is a broad concept and now become a matter of high importance. There are ample of examples and evidences about the significance of sustainability and corporate responsibility in many worldwide businesses in different industries. Like in the automotive industry Ford and Mitsubishi, in the fashion and clothing industry H&M and in the food industry Nestle, Unilever and Coca Cola (Aksak et.al,2016).

Food retailing organizations sell and produce food products and utilize waste and surplus. These companies play big role in the society and contribution in the community. “Food is a social good that society needs in everyday life” (Vitolla et.al,2016). Some of the challenges that the companies face in the food industry related to CSR and sustainability are:

Supply Chain Problems

The CSR opportunities and threats are shifting from single firm network to supply chains as in the food industry many problems lies from a food supply chain.  It is not in hand  of companies to control all the parties that are involved in the supply chain so it is challenging task in food retail industry to follow sustainable practices. However, organizations from their hand trying to use resources in an efficient manner but in the food industry there are problems related to food safety, food hygiene, retailer power abuse, and issues related to child labour and retail chain scandals (Janseen et.al,2018).

Best Practices in the Food Industry for Sustainability and Corporate Responsibility

Societal Concern

The food industry establishes a commitment to the health of its customers and society that indicates all the food products are concerned to follow set standards. At the global level hunger is a great issue as many people in different countries are dying because of malnutrition. Here CSR activities by the food companies play an important role. Is challenge for the companies in food industry to reach and reduce the impact of their activities as except this organizations aim is profit maximization.   The food companies feel society pressure, government pressure and pressure of different rules and regulation that make it challenging for the firms to contribute in society through CSR activities and by following ethical business practices (Skilton and Purdy,2017).
Commitment to the Environment Friendly

The food industry contributes about 27% of global resources, 31% of acidifying emissions, and 18% of greenhouse emission.  Due to that higher global involvement of the food industry it is important to make food industry more efficient and accountable.  It is a challenge for the food industry to commit to eco-friendly processes for production as there are no such processes through which the companies can produce to the larger scale.  On other side, complying to food industry standard, delivering according to requirements of consumer and then getting enough profit margins is quite difficult situation for the firms in the food industry (Ngwu et.al,2019).

Environmental impact

The major challenge that the industry is facing is related to degradation of the ecosystem. The food industry highly depends on natural resources. In order to save the environment and ensure sustainability of natural resource a single firm cannot reduce the impact, it is done collectively. But due to many unethical practices followed by the big players in industry it becomes difficult to make everyone accountable for their actions. Many companies manipulate their sustainability report and show CSR activities and spending on the environment and society. This is challenge because it is difficult to establish a feeling of belongingness in the organization culture and operations. The firms need to understand it and contribute to the greater extent for environment safety and protection (Moggi et.al,2018).

Nestle is a leading global food company that headquarters in Switzerland.  The company recognized as global leader in reducing carbon emission and managing climate change. Nestle integrated sustainability in its business model and announced “2020 commitments and long term ambitions in support with 2030 United Nations sustainable development goals”.  Further, the company decided to fight hunger by providing healthier food and lives to 50 million children, promote rural development by giving employment opportunities, and contribute for the planet by implementing policy of “zero environmental impact because of the company’s operations (Moggi et.al,2018).

Examples of Sustainable Food Companies

Nestle is contributing for solving the key challenges that the world is facing that are over and under nutrition or lacked of access to nutritional food, negative impact of human right abuses, youth unemployment, food waste, changes in consumption and impact of animals and natural ecosystem,  water scarcity and population growth. In order to solve these issues at the global level, the company take care of various aspects in its food supply chain that includes working with farmers for getting raw material, concentrating on using resources efficiently and following ethical practices (Scott,2018).

Tesco is also a sustainable organization as the company aims to offer healthy, affordable and sustainable products to people. Tesco source its products in sustainable manner and promote human rights in its supply chain that indicate that the company is following the practices of sustainability in its food supply chain and promoting human rights. UK Fair for Farmers Guarantee is an initiative taken by Tesco for farmers. The company has taken strong initiatives to build a great relationship with its suppliers and getting products in a sustainable way (Shaw and Shaw,2019).

In the food industry, the best practices that should be followed by the companies or firms are related to sustainable agriculture by influencing local suppliers and vendors to shift to organic agriculture practices as this reduce the negative impact of chemical, pesticides on the land. Food industry is one of the key segments that contribute to the sustainable agriculture and food processes.  It is forecasted that the population of the world reach to 9.1 billion that is 34% higher in 2050 and to meet the requirements of people in future food production need to increase by 70%. More production needs to be done with limited resources such as land, energy and water (Rueda et.al,2017).

Sustainable Agriculture practices in food chain

In order to reduce the impact of production on the environment following practices can be adopted such as procurement of food ingredients or raw material from sustainable sources for example purchasing fish products from companies that promote sustainable fishing practices, purchasing palm oil from the companies that produce them without harming the environment.  Sustainable agriculture for food production is the best practice that firms can follow as this helps in saving the natural resources such as water, land and energy (Devin and Richards, 2018).

The companies if promoted sustainable agriculture practices to farmers from where they source its raw material will benefit the society, environment and the company. This practice is the best because it is beneficial for environment and for health of human. The crops produced from sustainable practices have more nutrients and are healthier and natural. On other side if the companies in food industry focus on this practice as CSR activity it will reduce the consumption of energy by 30% per unit of crop. It benefits the environment by reducing soil pollution, by minimizing the energy and water consumption (Govindan,2018). If the companies promote sustainable agriculture through its CSR activities leads to many benefits such as:

• Contribution to conservation of environment
• Helps in preventing pollution
• Reduce cost of production and benefits company as they can get higher margin
• Biodiversity
• Benefits to Animals and other living creatures
• Benefits farmers economically
• Social Equality
• Safety of environment

Benefits of Sustainable Agriculture and Corporate Social Responsibility in the Food Industry

The ethical issues and moral issues that the companies might face while implementing the practices of sustainable agriculture cannot be neglected. CSR has been part of responsible and ethical business practices but the concept gain importance because of globalization. It is necessary for corporations to integrate CSR in its strategy and governance structure. From the view of Freeman et.al (2010) normative stakeholder theory, it is said that corporate social responsibility is a subset of business ethics. “Stakeholder theory begins with the assumption that values are necessarily and explicitly a part of doing business”. The organizations have some duties and responsibilities for the environment. Stakeholder influences everything and the businesses face issues in fulfilling the needs of each and every stakeholder that are community, suppliers, employees, customers, and shareholders. The aim of the companies is to deliver value to its stakeholders in order to do so the companies need to focus on working ethically and considering the moral values so that the stakeholders can be satisfied and much value can be deliver to them (Kaplan, 2019).

In order to meet stakeholder’s requirements, run business in profitable manner and to work according to government regulation businesses face difficulty. It is criticized that businesses have one responsibility that profit maximization this leads to ethical issues as the businesses in order to attain this objective use unethical ways and this leads to more harm to society and environment. Further, the businesses believe that CSR activities consume organization’s money and time of employees that takes away the profits and ultimately divert business from its main objective that is of wealth maximization of shareholder. In context to implementing sustainable practices it is duty of the firms in food industry segment to ensure food hygiene, food safety and sustainable food supply chain.   Ethics plays an important role here as there are many scams that take place in the food supply chain that are related to exploitation of human rights of suppliers, exploitation of environment, and corruption (Costa and Pittia,2018).

Here, in order to know whether the practices are ethical or not or comply to all laws in the food industry some of the business ethics theories can be used that are utilitarian approach and deontological approach.  Utilitarianism theory states that an action that brings greatest pleasure over pain for everyone is considered as ethical decision. On the other side, deontological theory is based on the concept of duty and obligation that means an individual is obliged to perform its duties and certain actions are right due to basic nature whether it benefit others or not (Crane et,al,2019). For example; it is duty of farmer to deliver to dealer the organic products as demanded by the dealer any breach of conduct or use of chemicals by farmers is considered as unethical and wrong whether it is benefitting farmer but it is unethical. Hence, considering these theories and the concept of business ethics it is suggested that sustainable agriculture practices can be used by the companies to promote through its CSR activities.

In the food industry there are many areas where the businesses that are operating in this sector need to focus on.  The global considerations in the food industry are environmental change, animal disease and health, community welfare and food safety.   At the global level, food industry is considered as one of the growing industry that contributes the highest in the world economy.   Due to that it becomes important for the companies that operate in food industry to act responsibly and use sustainable practices in their production and business operations (Packers et.al,2019).

The companies need to firstly take care of environment changes; the concern for global environment change refers “to the totality of changes both anthropogenic and natural”. The animal agriculture affect mainly to this change as it consumes 30 percent of the land surface of earth and  that resultant in 72% of deforestation and consumption of 32% of fresh water (Lever and Evans ,2017). The global climate change is happening because of excess use of land and water and because of animal and human activities. The businesses that operate in food industry should use techniques that bring more out of limited resources as using water efficiently in agricultural production help in overcoming the issue of climate change and decreasing agriculture production also leads to minimum use of resources (Weng et.al,2019).

Another global consideration is animal disease and health as in food industry animals are most used ingredients that increases the risk of infections and diseases in human. The main goal of animal health is food safety and food provision.  Most of the health issues in the human are linked to animal diseases. The businesses that operates at the global level need to take care of this aspect and in order to do so it is recommended that the companies should strictly follow guidelines of  countries and conduct activities to make suppliers and consumers aware about the diseases and  health situation of animals this further leads to sustainable agriculture practices. On the other side, major consideration at the global level is food safety that means the safety of food from animal infection and use of pesticides and chemical (Virakul and Russ, 2019). It is recommended that the companies in order to run at the global platform should need  to conducts CSR activities related to organic food production, sustainability in agriculture practices and  conducting programs to encourage suppliers to shift to organic farming and to promote consumers to reduce waste  in food sector.

Conclusion

It is concluded from the report that business ethics is considered as important aspect in order to sustain on the market. Business ethics are the way business run and the impact that they have on society and community in a positive manner. Further, corporate social responsibility and sustainability are two important areas in business ethics that ensures ethical and moral consideration in business practices. In order to understand the concept all the discussion in the report is based on the food industry. In the food industry, the companies are facing many challenges related to CSR and sustainability that are bringing sustainability in food supply chain, reducing the impact of production on environment and difficulty in fulfilling the commitment to eco-friendly techniques in packaging and production. Further, two cases are discussed Nestle CSR and sustainability activities in the food industry and Tesco sustainability practices in order to identify the contribution and impact on the development of society and to protect the environment.

At last, considering moral and ethical issues in the food industry best practice is recommended that is focus of business should be on sustainable agriculture practices that include ensuring use of sustainable techniques in procuring food from farmers and promoting organic food in order to encourage food safety. Further, it is recommended by taking the global considerations into account that are global climate change, animal health and diseases, and food safety. From that it is recommended that the businesses that operate at the global level should be more responsible by following ethical practices in its food supply chain, encouraging suppliers to use sustainable agriculture practices and by efficiently using the land and water. Further, the companies should conduct corporate social responsibilities activities in order to promote eco-friendly agriculture production techniques and by investing on building infrastructure for organic food production.

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