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Introduction: Building a Sustainable Business
Corporate social responsibility is the self-regulating business model which benefits an organisation to be socially accountable to the public, stakeholders and to itself which literally mean a careful consideration of the community, environment, society and human rights in which an organisation operates. It is incredibly a vital aspect for Organisational success. It benefits in increasing brand awareness and brand recognition among customers which benefit in boosting sales of a company (Singh and Misra, 2021). Furthermore, it also helps an organisation to save costs in multiple ways by decreasing their production cost. Hence, adhering to corporate social responsibility is of utmost importance for organisations.
This particular report will highlight the discussion of the British supermarket chain named Iceland Foods Ltd drawing an evaluation of the ways how CSR contribute to Organisational sustainability and corporate actions that contribute to the CSR performance of the Iceland organisation will be drawn out. Lastly, the competitive advantage gained by the organisation through CSR and the impact of CSR upon purchasing decision of consumers will be discussed.
Overview of the company
Iceland Foods Limited is situated in DEESIDE, UK and is the branch of the Retail Stores Industry. The company consists of 30,256 employees at this location and engenders almost $5.24 billion in sales (USD). As a matter of fact, this company is considered one of the leading suppliers of frozen food retailers along with attributing in excess of 750 retail stores fresh and frozen foodstuffs (Berndtson, 2021).
The ultimate purpose of the CSR activities of the food retail company is to respect the environment, along with activating programs to diminish its energy requirement, exploit the utilisation of sociable gases, and cut food and packaging waste. The company attempts to decrease the environmental impacts which are considered co-ordinate through a cross-functional team (Chazireni and Kader, 2019).
Evaluation of How CSR Contribute to Organisational Sustainability
The concept of corporate sustainability has a fluid definition that can vary among different organisations. In a simple term, CSR benefits in building a relationship with community and organisation and also facilitate making a positive difference within the community through employee engagement, financial support and volunteerism. The main purpose of corporate social responsibility is to do well for the community via responsible action of the organisations (Agudelo, Jóhannsdóttir and Davídsdóttir, 2019). Companies often use CSR and sustainability words interchangeably. For instance, some organisations have sustainable strategies and some have CSR strategies.
Cause behind Ranking
Environmental CSR Approaches
The main concern for any organisation is to maintain its effectiveness and productivity. CSR is a unique approach for organisations through developing infrastructure and better institutional climate for the workplace to sustain their profitability and competitive advantage. The firm has a long history of being committed to achieving excellence in its corporate social responsibility. The organisation focus on respecting the environment and they are active in participating and conducting programs to reduce energy demand and maximize the use of environmental friendly gasses and also the organisation focus on cutting packaging and food wastes. This type of initiatives will ensure the firm to maintain a balance in the environment which is very crucial due to the growing pressure to main environmental sustainability.
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In addition to this, as per their Goal 14, the organisation aims to sustainable use oceans and conserve seas and marine resources for maintaining sustainable development. Furthermore, they have also ut a focus on Life on Land as per their goal15, by protecting, promoting sustainable terrestrial ecosystem, manage forest sustainably, combat deforestation etc.
CSR Approach under Social
In addition to this, the organisation also emphasize the activities which can provide benefit to the customers and employees and also to the future generations. Their plan of ‘Doing it Right’ aims at UN sustainable development goals which are driven by the people working employees and communities in which they serve. The overall actions are directly contributing to the organisation to create a sustainable future. In addition to all these initiatives, the organisation also support the communities they serve through multiple charitable foundations and paying taxes. Iceland also put huge emphasis upon delivering quality food to their consumers which has helped the organisations to build a sense of loyalty. Lastly, these goals will help the organisation to incorporate social, economic and environmental responsibilities in an efficient manner which as a result helps the organisation to build sustainable growth of the organisations as it is benefitting in strengthening the relationship with the suppliers along with the consumers (Agudelo, Jóhannsdóttir and Davídsdóttir, 2019). Furthermore, it is also benefitting Iceland to retain and attract the most skilled and knowledgeable workforce which is contributing to better product quality and entail a sustainable position in the market.
Under Governance
The organisation has complied with the tax strategy following laws in each jurisdiction in every store where the firm operates. The group has utmost importance while it comes to considering tax affairs (Iceland, 2020). The firm possess a framework through which the tax processes are run and controlled. The firm has also shown remarkable initiative towards risk management via their CSR which has increased the employee productivity and turnover rate of the firm.
Analysis of the Company Rank Acquired by the Organisation through CSR policies against its Competitors
Corporate social responsibility or CSR policies consist of multiple advantages that might be applied to any business. The CSR activities of a particular company or business might help the business to be able to maintain optimistic business reputations, better financial performance, and superior brand recognition. As a matter of fact, it has the ability to make a business reputable and to facilitate in gaining a competitive advantage. Iceland Foods Ltd has been able to make its business sustainable through the appliance of appropriate CSR policies. In this section, there will be an illustration of the CSR policies implemented by the company for better development of the company.
Diminishing the amount of carbon footprint: The food retail company has officially qualified as having accomplished the Carbon Trust Standard during March 2010. It has been observed in an extensive manner that the company has always been specific about utensils and components which basically function with the least amount of power (Anon, 2021). Iceland has attained an 18% diminution in energy convention at their Deeside cold store in the course of investment to reinstate the refrigeration assets in 2016. Not also this policy helps the food retail to decrease their operational cost but also it help in maintaining a competitive advantage within its major competitors (HuffPost UK, 2018).
The removal of artificial colors on foodstuffs: Iceland Foods Ltd is considered as the first company in the UK, initiation the fact of prohibiting GM ingredients, along with eliminating artificial colors from their foodstuffs in 1999. They also have taken significant steps in diminishing the hydrogenated fats in 2005. Due to the commencement of these significant steps, the company has been able to establish itself as the only company to promote healthy products (Berndtson, 2021). Regarding the fact of COVID19 pandemic, people have become health conscious and they are now willing to purchase only healthy foodstuffs. This has been proved to be accommodating for this food retail to maintain its profitability in difficult times.
Maintenance of quality, honesty and clarity: It has been observed comprehensively each and every Iceland product is undoubtedly labeled with components and nutritional information along within usage of the 5-A-day logo (Anon, 2021). On the other hand, the standard is that Iceland products have to be of superior quality than the corresponding line sold by foremost rivals at the same price at an inferior price. As per the viewpoint of Edelman's Trust Barometer in 2017, it basically demonstrates that only 33% of people trust UK businesses (Jones and Comfort, 2018). Regarding this fact, the company has been able to obtain huge competitive advantages and it facilitates the company to build a brand reputation in the marketplace of the UK.
Returnable packaging systems: Iceland Foods Ltd has utilised a particular system specifically in terms of packaging. During the time of delivering packages into the stores, the company has implemented a strategy to return its packaging systems (HuffPost UK, 2018). After that, it will be exploited to deliver another item or goods. It has been proved to be accommodating for the company to save its operational cost.
Description of Corporate Actions Contributed to Current CSR Performance
As mentioned, Iceland has a long history of doing the right thing and they are dedicated to playing their part in achieving the United Nation's Sustainable Development Goals. In this regard, the organisation has shown remarkable steps and corporate initiatives which have contributed towards their corporate social responsibility. In this regard the organisation has emphasized the trust they have built to become a responsible business through delivering quality and valuable products to the consumers, the organisation sells. In addition to that their support towards their employees and communities through multiple initiatives are also remarkable which ensure the wellbeing of 30000 colleagues of the organisation.
In 2015, the organisation has published an SDG report demonstrating their focus upon their contribution towards making a better future for everyone. They have built a to-do list for the aim for all the people in regard to wipe out poverty, fight inequality and tackle the climate change challenge with the year 2030.
Fig 2: Sustainable Goal of Iceland
Among these 17 sustainable goals, the organisation have a particular focus on the 5 goals. In addition to that, there are multiple notable goals the organisation have initiated including decent work and economic growth which will promote sustained, inclusive and sustainable economic growth, employee productivity boost and decent work for work will be encouraged. The organisation will also ensure sustainable consumption and production pattern.
In order to reduce food waste, the Iceland Foods Charitable foundation developed a partnership with the national marine conservation charity Surfers Against Sewage for growing its ‘Plastic-Free Communities' movement and initiating a fight in order to avoid single-use plastic among the communities across the UK. For the community and colleagues, the retail firm has raised £ 30 million for their charity via a partnership between Iceland Foods Charitable Foundation and Alzheimer's society. The colleagues of the organisation are taking part in the sponsored Memory Walks and the foundation is also supporting the monthly screening of dementia-friendly cinema settings. In addition to that in 2021 and 2022, the firm is powering the ‘Million Mile Clean’ through their Foods Charitable foundation. In 2021, 10000 volunteers over 3000 beaches, cities and rivers and mountain regions of the UK have initiated a clean-up activity in order to gather 320,862 kilos of rubbish (Iceland – Doing it Right, 2021).
Iceland work with 300s suppliers who help the organisation to deliver the products to consumers with great value and high quality which has also contributed towards building trust with Organisational stakeholders. In addition to that, due to delivering consumers frozen food, there is a wide array of advantages the organisation enjoys. In addition to that, the organisation is always dedicated to valuing their consumers in this regard, they have become the specialist in innovation and their food products are served by removing palm oil ingredients and plastic packaging and also lessening the amount of salt and sugar in their foods which have given the consumer's health advantage.
Fig 3: Poster of Iceland for the Million Mile Clean initiative
(Source: Iceland – Doing it Right, 2021)
Understanding the Organisational CSR Approach for Impacting Purchasing Decision of Consumer
Corporate social responsibility plays a huge role in influencing consumer buying behaviour through a wide range of variables such include, commitment, trust and perceived value. These aspects play a huge role in terms of enhancing the feeling of satisfaction, loyalty among the consumer and also serving value to the customers (Musfialdy, Soim and Edison, 2020). Iceland’s corporate social responsibility has always created a mark of glory in its journey. Firstly, the Organisational approach towards the wellbeing of the customers is incredibly applaudable. The corporation has first decided to avoid the artificial colour from their foodstuffs which has delivered a health advantage to the customers. In addition to that Iceland also focus on reducing the amount of sugar and salt used in their products. In the present time, people are more encouraged to buy products that give health value to the customers. In regard to this, due to health benefits, customers prefer to buy products from the Iceland organisation. According to various researches, along with affordability, it is environmental initiatives and the human focus approach of organisations that impact the customer buying decision. Of course, affordability plays a huge role in people’s buying decision but people nowadays consider more choosing an organisation or product which are committed towards the environment and social responsibility.
In this regard, Iceland's environmental responsibility will be of utmost importance and create loyalty among the mind of customers. Their approach towards reducing plastic pollution through their Deposit Return Scheme in order to decrease the plastic recycling rates and trialling Reverse Vending Machine in their store will encourage loyalty as it will encourage a feeling of care among the customer along with environmental sustainability. In addition to this, their goal towards reducing carbon footprint will help the organisation to gain multiple benefits. In March 2010, Iceland has officially certified that they will achieve a 15% reduction in carbon emission over three years of assessment (Iceland – Doing it Right, 2021). They have decided to reduce carbon emission by 60% by the year 2030. These practices will show the consumers their commitment towards the environment which will encourage customers to pay little more than the charged amount due to the socially conscious nature due to the organisation.
Evaluation of the Challenges Faced by Organizations for Meeting Societal Expectation for CSR
The performing of CSR activities is indeed a concerning issue for every company. Sometimes executing these activities might be proved to be challenging for various issues. There are some challenges that Iceland Foods Ltd has to encounter during the time of implementation of these CSR activities.
Financial crisis: Iceland Foods Ltd has invested heavily in lighting in stores to LEDs maintenance of carbon emission in their stores almost £3.2 million in 2017. Therefore, the food retail company has installed smart control systems in terms of its four stores and its purpose is to observe and manage energy spending in lighting, refrigeration and progression cooling at the equipment level (dairyreporter.com, 2018). This particular system has been proved to be accommodating in facilitating the food retail rapidly in order to make out any kind of wastage and make certain prompt corrective action. In order to initiate these particular activities, the company had to expand numerous economic resources and installing these particular systems is a time lengthy procedure (Jones and Comfort, 2018). These sometimes create obstacles in the process of manufacturing and major operations. Therefore, the company has to face major constraints in sustaining CSR activities as well as balancing financial ability.
Increasing price: In order to make a balance of operational cost along with within initiation of various policies for meeting societal expectations for CSR, Iceland Foods Ltd has automatically required enhancing their product price (dairyreporter.com, 2018). Compare to its major competitors such as Tesco and Sainsbury's, Iceland promotes quality products but at an elevated range of prices. It has been observed in an extensive manner that the impact of the COVID19 pandemic has influenced heavily on creating an economic downturn worldwide (Chazireni and Kader, 2019). Thus, purchasing products with elevated prices might not be accommodating for every customer of the UK.
Conclusion
From the overall illustration, it has been observed that maintenance CSR activities are extremely necessary for all the brands and organisations in order to gain a competitive advantage and to fulfill the requirements of the customers. In the case of the retailers of the UK, they really need to work on this particular issue as a customer has less faith in the components of UK retailers' products. However, Iceland Foods Ltd is doing great by initiating various systems which basically facilitate them in sustaining CSR activities for the best quality product. Furthermore, by lowering the product cost the company can develop more in the marketplace of the UK.
References
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Bloomberg, 2021. Iceland/Supermarket - Company Profile and News. [online] Available at: https://www.bloomberg.com/profile/company/0837108D:LN.
Chazireni, B. and Kader, A., 2019. The Impact of CSR on the sustainable growth of wholesale and retail SMEs: The case of eThekwini Municipal region. Expert Journal of Business and Management, 7(2).
dairyreporter.com 2018. Iceland to discuss its 2023 sustainability goal and future challenges for the packaging supply chain. [online] dairyreporter.com. Available at: https://www.dairyreporter.com/Article/2018/02/14/Iceland-sustainability-goal-and-challenges-for-packaging-supply-chain [Accessed 11 Dec. 2021].
HuffPost UK. 2018. Why Supermarkets Must Follow Iceland’s Lead On Plastic-Free. [online] Available at: https://www.huffingtonpost.co.uk/entry/why-supermarkets-must-take-icelands-lead-on-plastic_uk_5a7acb31e4b01109985cd8f0 [Accessed 11 Dec. 2021].
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