Sustainable Operations of Carrefour - Research Paper Example

Full Topic: Sustainable Operations of Carrefour Introduction Sustainability operations in managing the environmental, social, and governance issues are useful for a wide range of business activities including new-product development, reputation building, and overall corporate strategy (Baroto et al., N.p). Sustainability strategy helps businesses gain competitive advantage, market positioning, building brand image and reputation and long term profitability. This study examines the sustainability operations of Carrefour which is the leading retailer in the Europe and the second-largest in the world followed by Wal-Mart. Carrefour is a multi-format, multi-channel and multi-local group comprising of approximately 9,994 stores which operates in thirty three different countries in the world. Stores operate in a range formats and channels namely, hypermarkets, supermarkets, convenience stores, cash and carry stores for professionals and hypercash stores which are specifically designed to address the requirements of different consumer segments. Some stores are designed by vertically integrating the stages in the value chain example, Hypercash stores combines the benefits of Cash and carry stores (wholesale) and convenience of hypermarkets (retail). Creating specific investment between stages of the value chain helps firms to internally exploit their pool of knowledge and capacities, and to guarantee quality of inputs and services employed (Díez N.p). Carrefour has launched specific sustainability oriented programs to the stakeholders in different stages of its value chain. The specific objective of this study is to evaluate Carrefour’s sustainability strategy in terms of environmental, governance and social aspects to cater the needs of various stakeholders. Literature review Sustainable development for the business enterprise can be defined as adopting business strategies and activities that meet the needs of the enterprise and its stakeholders while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. This definition suggests that business growth must meet the needs of its shareholders; lenders, customers, employees, suppliers and communities who are affected by the organization’s activities which must not irreparably degrade or destroy the natural and human resource bases in its venture for raising physical and financial capital. Carrefour adopts a sustainable development self-assessment tool for the suppliers which is a detailed self-evaluation framework designed in conjunction with the World Wide Fund for Nature (WWF) and the French Environment and Energy Management Agency (ADEME), accessible to suppliers online, including forty nine self assessment criteria based on four central pillars: sustainable development management and policy; environmental performance; workplace performance; and economic performance. This tool enables the company to regularly monitor and assess the system for sustainability. Environmental: Reducing the environmental foot print as a sustainable strategy As markets globalise, competition intensifies, and both consumers and investors become more demanding the companies can no longer simply use compliance plans to deal with the environmental concerns and operational efficiencies that require long term strategic and sustainable approaches (Styles and Goddard N.p.). Wood Charter for Suppliers enables Carrefour to participate in sustainable forest management. By signing the charter, suppliers using wood, pulp, paper and products derived from these materials commit themselves to ensuring the legality of their supplies, respect for local populations, no sourcing from High Conservation Value (HCV) forests and no sourcing of species included on the International Union for Conservation of Nature (IUCN) red list of threatened species or species protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) agreement. At the same time Carrefour is committed to using only sustainable palm oil in its own-brand products as measure to reduction of deforestation, using eco friendly packaging materials, recycling and recovering waste from operations, reducing and managing the impact of its retail centres via integrating environmental criteria into the construction and renovation of stores (example, designing energy-efficient stores, clean work sites); reducing stores’ carbon footprint and energy consumption; managing its sites’ water consumption; and increasing the percentage of waste recycled at stores. Governance: Ethical Conduct as a sustainable strategy Stakeholders’ increasing expectations regarding Ethics and transparency is very important to the sustainability of a business enterprise. Carrefour for example, supports the Social and Ethical Charter in hand with the International Federation for Human Rights (FIDH). Compliance of the organization’s activities with the Charter is regularly monitored, via independent experts in external audit firms, as well as to provide long-term supplier support. This methodology consists of the following steps: 1) presentation to suppliers of the conditions of their commercial relationship with Carrefour, a commitment by suppliers to the principles of the Charter and on-site inspections carried out by Carrefour teams 2) external, unannounced on-site inspections carried out by professional audit firms selected by Carrefour 3) random, external, on-site inspections carried out during FIDH missions under the INFANS scheme 4) implementation of a corrective action plan following the audit, co-signed by the supplier, and the recommendation of additional measures by the FIDH if necessary and 5) monitoring of corrective actions by Carrefour teams, and follow-up audits. Human resource (HR) factors such as top management support, environmental training, employee empowerment, teamwork, and rewards systems are the key elements of a company’s sustainability. Carrefour trains its employees throughout their career with regard to cooperate social responsibility as well as skills development. Employment exchange and re-organisation creates a transparent internal recruitment system and encourage managers in overstaffed hypermarkets to move over to supermarkets (Carrefour 40). In France, Carrefour has been promoting its suppliers’ Corporate Social Responsibility approaches through the “Sustainable Development Awards,” a scheme that awards the best suppliers. The winners are selected by a panel of experts from the ADEME and WWF France, specialist journalists and Carrefour Group representatives. This scheme helps the company recognizing exemplary approaches that encourage others to take similar actions. Each year, the Carrefour Sustainable Development Awards are given to four businesses example in 2012, the winners were: Château de Nages (fruit); Biscuiterie de l’Abbaye; Arc International (tableware) and Bodin (Carrefour organic chickens) (Carrefour 42). Social: Maximum safety guarantee for the consumers Carrefour’s suppliers have committed to complying with strict specifications that define the product’s basic characteristics such as the taste, price positioning, compliance with regulations and standards, the origin of raw materials, the recipe used and processing methods of food items. Carrefour’s product specifications are focused on customer expectations and also health concerns such as genetically-modified organisms (GMOs). At the same time Carrefour also takes precautions in selecting products’ composition when formulating its non-food ranges and to be proactive and anticipate new regulations particularly in REACH (Registration, Evaluation, Authorisation and Restriction of Chemical Substances) regulation. The company attempts to impose stricter requirements than those laid down in the international regulations. For toys, for example, the REACH regulations require to control of six phthalates while Carrefour, prohibits the use of these six phthalates (Carrefour 43) Conclusion Carrefour has developed a multi-disciplinary protocol to ensure the long term sustainability of the business while meeting the demands of various stakeholders at stages in the value chain. Documentation of commitment and policy; planning; implementation; measurement and evaluation; and review and improvement are important characteristics of this protocol leading to its success. This study focused on three elements of Carrefour’s sustainable strategy namely, environmental aspects, ethics and transparency and guarantee of maximum safety to the consumers. Complying with the international standards and strict standardizing procedures are important for Carrefour in achieving its sustainable developmental goals. References Baroto M. B., Abdullah B. M. M. and Wan H.L. “Hybrid Strategy: A New Strategy for Competitive Advantage.” International Journal of Business and Management, 7.20 (2012): 120-133 Carrefour. 2012 Registration Document, Annual Financial Report. Emile Zola: Carrefour, 2012. Print Díez-Vial, I. “Explaining Vertical Integration Strategies: Market Power, Transactional Attributes and Capabilities.” Journal of Management Studie, 44.6 (2007):1017-1040. Print Styles, C. and Goddard, J. “Spinning the Wheel of Strategic Innovation.” Business Strategy Review, 15.2 (2004):63-72. Print Read More