I am flattered that you should consider inviting me to join you here today at this first international meeting of the Consumer Goods Forum. As the founder of a rather small food company, it is a very special opportunity to address a global food trade body that I believe has the potential to make the most enormous difference to the future of world agriculture and, not to put too fine a point on it, to our very ability as a species to survive.
I see the merging of your three separate organizations – the Global C.E.O. Forum, the Global Commerce Initiative and C.I.E.S. – as a very significant move indeed. You have created an organization made up of 650 companies from seventy countries with combined annual sales of over 2.5 trillion dollars.
There are 6.8 billion people in the world and you represent an industry that touches each and every one of them every single day. They are your customers and, crucially, your suppliers. So, what you do affects every single country. Even individually, some of you are so large that you have a business that is larger than the economies of some nation states, which means that by combining your efforts you represent a formidable force for good. By my reckoning there can be few organizations better placed to address some of the most pressing problems in the world today.
And all of you, being retailers, put the consumer right where the consumer needs to be in the debate – at the very heart of the matter. Consumer patterns play a central role in the many environmental challenges facing our planet. Please make no mistake about this, the health and stability of the global economy ultimately depends upon the resilience of the world's ecosystems and the durability of the Earth's limited natural resources. Whether it be climate change, the growing scarcity of fresh water, the loss of fertility of the soil or the destruction of so many of the world's vital eco-systems, the behaviour of the consumer is fundamental.
Patterns of consumption, the global economy, political stability and environmental sustainability are all integrally linked. And this is why, in my view, that if we are to tackle these problems, then the food retail and manufacturing sector has to be a central element in the solution. You, ladies and gentlemen, are absolutely essential to the future well-being of the planet and its ever-growing population. What you do and how you behave are pivotal.
What is certainly the case is that the many problems we now face will not go away if all a company does is paint its products a brighter shade of green. Only by recognizing that there is a direct relationship between the consumer and the environmental problems that now exist can any properly responsible action be taken. Unless that key relationship is recognized and lies at the heart of your thinking, then the many worrying problems we face will only get worse.
The reason I am here today is through the good offices of Mark Price who, last year, asked if I would offer a few words to the C.I.E.S. meeting in New York . I managed to do it carbon-free by appearing there in a somewhat disembodied, virtual form. But I was very pleased to do so because it gave me the chance to raise the subject of the perilous state of our marine ecosystems. I gather Simon Crutchly is going to discuss this with you in more detail after I have gone, but I hope he won't mind if I steal a little of his thunder to expand briefly on this issue, simply because it is one of the starkest examples of which I am aware that describes the underlying pattern to things as they stand. I happen to believe that some innovative thinking around this particular problem could stand as a template for similar solutions in other sectors. So it is more relevant to all of you than at first might appear to be the case.
For what it is worth, I happen to consider this to be one of the most pressing problems of our day and the dichotomies that infest its heart demonstrate just how the relationship between human consumption patterns and Nature's freely-given resources has the capacity to make or break economic and environmental sustainability.
The facts, Ladies and Gentlemen, as they stand are alarming. The latest figures from the U.N.’s Food and Agriculture Organization are that over seventy-five per cent of commercially valuable fish stocks are either fully or over-exploited and that, worldwide, in just fifty years we have consumed more than ninety per cent of the large predatory fish in the oceans. In many places the numbers of fish like tuna and cod are now desperately low. They are only ten per cent of what they were forty or fifty years ago. What is more, the world's fishing fleet is estimated to be forty per cent bigger than it needs to be to bring in a sustainable catch. And if you really want me to depress you, let me tell you that some researchers estimate that, on current trends, virtually all commercial fisheries will have collapsed by 2050, which is not all that far away, unless we take urgent action to put in place a more precautionary approach to the way we manage commercial fishing.
The prospects if we don’t do that are truly terrifying. Fish is the primary source of animal protein for about one-sixth of the world’s population. For example, it accounts for forty per cent of the diet in African coastal nations. We cannot continue to denude our oceans when we know what we are doing. And although I know this is a monumentally difficult problem, I would just ask all of you to consider what the world will be like when the fish stocks have all but disappeared; when the ecosystems of which they are a crucial part break down with consequences that we have barely begun to understand, and when the full social ramifications around the world start to make themselves known? It is not just marine life that is suffering. Many coastal towns and villages around the world that once thrived on the riches of the sea have already become hollow shells of the vibrant communities they once were, and still ought to be. If fish stocks decline further, this situation will only become more common. And I have no doubt at all that, once again, it will be the poorest people in the world who will feel the pain first. In many cases their livelihoods are already at stake. And then what? Many will have no choice but to turn to piracy; others will have to move, with all the risks of conflict over scarce resources and mass migration. Make no mistake – we are talking about increasing threats to global security on a grand scale.
This is the situation we have reached. The problem exists now. It is why I would urge you to recognize that as the suppliers of food to the world's consumers, you simply must become stronger advocates of sustainable forms of fishing and other forms of agriculture. Without your commitment and energy, believe me, there will be no change. And “no change” is not an option.
The question is, what changes will make a substantial long-term difference? There is not one simple answer, of course. But there are several approaches which together and with your backing could make a substantial difference. Certainly, for one thing, in terms of marine ecosystems, it would have a considerable impact if many of the companies represented here today either adopted or strengthened policies of sustainable sourcing. Just to stay with my example of fishing for a moment longer, we cannot allow the situation to continue where over seven million tonnes of the fish caught are discarded. That means over half, or more, of a single haul can end up being thrown back into the ocean with little or no chance of survival. This is not sustainable or even moral. Nor is the ruthlessly industrialized scale of these catches. Such has been the drive on efficiency that, in the past twenty years, the same number of boats can now catch around fifty per cent more fish. And there are plenty such boats indulging in illegal fishing. Would you believe that fishing boats are not required to have ship identification numbers, let alone the advanced on-board vessel monitoring systems that are now available, which makes it impossible to monitor and enforce the international regulations. If retailers insisted on full traceability and supported improvements to vessel monitoring, then the transparency about the locations of vessels and the methods by which fish are caught would become clearer. So this is certainly one field where you could make a considerable difference.
Recent surveys of consumer trust have shown that the public place retailers over and above doctors, policemen, politicians and banks. This gives retailers a unique opportunity and a unique responsibility to make sense of complex issues for consumers who are struggling to understand what is the right thing to do when presented with so many different choices. Successful retailers do all the hard work for the public, so that their decisions are made much easier and more straightforward. So it is up to retailers to ensure that their fish and sea food has come from sustainable stocks and been fished according to sustainable practices. And if you insist that the fish are caught using low impact methods then, again, you will help make a considerable difference. In the U.K. , many retailers have been making considerable progress towards demanding low impact fishing methods like line-caught fish. Waitrose, Marks and Spencer, Sainsbury’s and the Coop are being particularly progressive, along with brands like Findus, Young’s and Birds Eye. But action has to go much further, it seems to me, and so let me briefly signal one or two important, innovative approaches, again because they offer a template not just for the fishing industry and its suppliers, but for many other sectors of the food industry that are dogged by similar patterns of behaviour.
We certainly need to expand the scale of conservation, or what are called “no-take marine reserves” to ensure the protection of areas that can replenish dwindling stocks. Less than one per cent of the oceans are protected for conservation at the moment, compared with twelve per cent on land. The International Convention on Biological Diversity requires all parties to set aside ten per cent of their marine environments and make them effectively managed marine protected areas by 2012, but this cannot happen without the private sector supporting the protection of these areas, whether they are within coastal zones or on the high seas. At present very few countries or regions are on-track to meet these targets and where marine protected areas have been implemented they are often too poorly protected, too small or too far apart to be ecologically coherent. I am delighted that we now have a Marine and Coastal Access Act in the U.K. and that we are making considerable progress towards designating an ecologically-coherent network of marine protected areas, but there is a vital need to ensure these areas are implemented. In contrast to coastal regions, the process of identifying areas for protection on the high seas has only just begun. Initiatives like the Global Ocean Biodiversity Initiative are identifying key ecologically significant hotspots on the high seas that urgently need protection, but if they are to be established, there will have to be strong political and commercial support. And that includes the commitment of significant resources so that these zones can be properly monitored and enforced.
When you consider that sixty per cent of all fish consumed by the E.U. is imported and that a significant proportion of that comes from the waters of developing countries, I would suggest most strongly that the private sector has a crucial part to play in investing in the development of fisheries in those countries, including the collection of scientific data, the construction of good seafood processing facilities and port infrastructure, as well as monitoring and enforcement facilities, so that these countries have the capacity to comply with international regulations and extract some of the wealth from their fishing industry through landing and processing the fish before they are exported to Europe.
I would similarly also draw your attention to some innovative investment models for the recovery of depleted fish stocks. One has been proposed by the W.W.F. and is called “Banking on Cod”. This idea has not yet been trialled but theoretically the transition period needed for the cod stocks to recover in the North Atlantic could be enabled by the private sector paying for the fishery to be closed for a few years and the welfare of fishing communities protected in the interim, in return for a long-term, sustainably managed fishery – in effect, creating a futures market for fish. The Scottish fleet have made admirable progress towards cod recovery in the North Sea through introducing rights-based management under the Scottish Conservation Credits Scheme. Innovative schemes like this would need initial private sector investment but, given that the World Bank estimates the fishing industry is worth at least fifty billion dollars a year and that its collapse would cost many more times that to restore, surely it is straightforward common sense that consumers are encouraged to invest in better managed fisheries?
These are ideas which I think are worth taking seriously and developing. Not least because where such mechanisms have been created there has been a noticeable difference. Some of you will know, I am sure, of the Marine Stewardship Council which certifies fisheries that are sustainably managed. I am very encouraged that over half of Scottish fisheries by value are now M.S.C.-certified or in the full assessment process and many fish processors, traders and retailers around the world have now made public commitments only to purchase seafood from certified sources. For example, in 2006 Wal-Mart, which sells about twenty million pounds of fresh fish each year, courageously announced that it will purchase all of its wild-caught fish from M.S.C.-certified fisheries by 2012. Other retailers such as Waitrose, have adopted their own rigorous standards on fish sourcing to ensure full traceability of their fish and the use of the lowest impact fishing gears.
That you have come this far encourages me that you have the foresight and determination to create momentum in many other areas. If the ideas I have mentioned are widely taken up, they could be tremendously effective – and so much more productive. Many scientists estimate that well-managed fisheries alone could increase productivity five-fold. But this will only happen if you can stimulate demand for sustainable fish; if you can educate and encourage your customers to eat different, less threatened species and if there is widespread and focussed agreement throughout the fishing industry that we should follow the scientific advice on catch quotas.
I have used fishing and the health of the world's marine ecosystems as my example, but even if you do not deal with fish, I hope you can see that this problem follows the same pattern of so many other sectors within your business.
Cutting down the world's rainforests, for instance, to feed livestock that are thousands of miles away, or to produce palm oil, not only destroys the vital biodiversity of the forests and pumps more carbon dioxide into the atmosphere than the world's entire transport sector, it also reduces the amount of rainfall that falls on important farmland in many regions of the world. Once again, it erodes an element of Nature's capital at an alarming rate, even though Nature's capital is the very bedrock of the kind of economic capitalism we have come to take for granted. It weakens the chain that actually binds our welfare with that of the Earth’s and I do sometimes wonder why we are so dogged by a form of collective hubris that blinds so many of us as to why the chain is becoming so weak.
And then we need to look at the way we use water, for instance. The World Bank has reported that in the Punjab over sixty per cent of groundwater is now being overdrawn by farmers. The intensive industrialized techniques reliant upon thirsty, high yielding seeds and chemical fertilizers have caused the water table in that region to drop by three feet a year. I have been there; I have seen it. Punjabi farmers now have to dig expensive bore holes over 200 feet deep to get at what remains of the water and, as a result, their debts are becoming ever deeper too – so is the salt contamination of their soil… This is why I started an initiative some four years ago to try and help a number of Punjabi farmers to convert to a more genuinely durable, sustainable organic system and to develop added value markets for their produce.
I recently met the Kenyan Prime Minister who explained to me the increasingly desperate situation in parts of his country, where they produce massive quantities of cut flowers for the European market. It is an industry that has provided good, short-term employment, but the downside is that lakes like Naivasha and Nakuru are drying up, with all sorts of disturbing long-term environmental and economic consequences which the Prime Minister fears may well be extremely serious. So, here again, is yet another country struggling to find a balance between meeting its economic needs that guarantee the welfare of its people without destroying the environment and ecosystems upon which everything depends. If it doesn’t find that balance, what is the future of Kenya ? In the short-term the country is kept afloat, but in the long-term the economy of the entire country is threatened by an environmental catastrophe that will bring about untold social unrest and political instability. And when that happens where, pray, do you buy your cut flowers from? Do you just move on to another country and allow the same mistakes to be repeated?
In each of these examples the line runs directly from far-away farms and fishing zones to the consumers of the world and, therefore, ultimately, to you. You are the gatekeepers. And, as such, you have a vital role to play, not just as the purveyors of fine food, but as advocates and as educators. Whether we like it or not, the situation facing us has changed dramatically. If we are to protect the future you will, I am afraid, have to shift your way of working, not least to look at the next ten or twenty years rather than just the dividend paid to your shareholders next month. You will have to recognize that you are as much an access point for information as newspapers and television. In fact, possibly bigger. Not everybody reads or watches, but everyone shops and how else will people really know what they are buying if you do not tell them? It is a potentially symbiotic, socially and environmentally productive partnership, as Wal-Mart has discovered and shown. If the consumer wants more information in order to make better choices, you are surely the ones who can supply it and, together, you then shape what is on offer and how it is produced. Which means – and many of you don’t need me to tell you this – you have to have a strong and supportive relationship with your suppliers. You have to help inform the producer and support changes to how they work.
I would just draw your attention to how Walmart and Carrefour refuse to stock beef from farms accused of illegal deforestation as an excellent example of good practice. Or how Unilever, Waitrose and Sainsbury are sending a very strong market signal by refusing to buy unsustainably grown palm oil. Using such market power to insist on sustainably grown oil, farmers are starting to grow it. I would also like to mention a company like Pick and Pay in South Africa as a way of acknowledging the admirable efforts of your Chairman at today's conference, Gareth Ackermann. He has helped to ensure socially and environmentally responsible investment by going to enormous lengths to encourage smallholders to diversify the crops they produce.
As I close, I hope my point has become gradually clearer. You really do stand at the bridging point between the maintenance of natural ecosystems, the products dependent upon their healthy functioning and the food security of future generations. Things have changed radically since we were all younger and everything was taken for granted. You can now make all the difference. You can make a difference by educating the consumer – not just about what to buy, but how to avoid waste. I am sure you are more than aware that forty per cent of food is lost between harvest and the processor. And in this country, another thirty per cent is wasted in the customer’s refrigerator. These figures are appalling, especially when there are millions of people short of food. There are plenty of reasons why this waste occurs, but among them are some of the standards you demand and the general attitude in our “throwaway society” that has developed in much of the Northern hemisphere. So I can only applaud Sainsbury’s marvellous campaign called “love your leftovers” which gave customers plastic boxes in which to keep leftovers, rather than throw them away.
From zero carbon stores to lightweight packaging, there are many approaches that harbour huge opportunities to transform consumption into one that is more mindful of the limits of the natural world and more geared to securing its durability in the long-term. But for that to happen the retail and food producing sectors can no longer act with any complacency. You do not simply manage a neutral conveyor belt that moves food and consumer goods from the field and factory to the shop floor and then to the home, and your target surely cannot just be the maximising of profit. That is not to say that profit is not important. Of course it is. But it has to be achieved in a way that embraces the wider cost to the Earth. And that means a much more inclusive bottom line. The cost to the Earth and the cost to future generations must become a part of the calculation of the cost of production.
This is the backbone of the concept of Corporate Social and Environmental Responsibility which I have been promoting now for twenty-five years – the core belief that well-founded business has the power to do enormous good. It was a view formed just over twenty-five years ago when Britain was in the grip of another recession. Then it was considered revolutionary to suggest that a company might have a responsibility to the society or community in which it operated. Now it is time to take another leap and to accommodate another acronym. From C.S.R. we need to move into the realm of C.R.S. – Corporate Responsibility and Sustainability. It will be a challenge, I know, but I would call on you today to consider whether you can bring to the core of your business agenda the care of those ecosystems that actually underpin your corporate success, as they do the basis of human welfare? Can you educate as well as service the needs of your customers who, I find, increasingly want to buy responsibly and act responsibly towards the environment upon which we all depend? To secure its future is to secure yours. But to do so we must all assume our rightful role as Nature's guardians and stewards. We can no longer consider her to be some sort of slave.
Ladies and gentlemen, you have given a remarkably good impression of listening to my assessment of the situation and the challenges you face on our behalf – particularly when I know how many of you are probably thinking about what you have been missing on the T.V.! I know, it’s all my fault! Believe me, as some of you know to your cost, I have concerned myself with the detail of these problems for many years – and many sleepless nights too. So I realize only too well that you are absolutely essential to the process of broadening the values by which we judge economic success and recognize the unbreakable link between Nature's well-being and our own well-being. Without your active participation and your wholehearted commitment to educating consumers and acting as our advocates, guiding producers and pressing governments to consider the proper value of what you sell, I see very little hope.
When you return to your boardrooms next week, I would just ask you to keep that thought in your mind. Individually, many of you are doing remarkable things. But, dare I say it, it isn’t enough. You can be such a global force for good and I know that you are more than able to rise to the challenge. The creation of your new organization is proof that you are determined to maximize your influence. When you look back in ten years time as business leaders, surely you would want to have made a real difference to our collective future security and to your grand-children’s chances of survival? If we want to have food security for the future, then you must help to protect and enhance the severely threatened ecosystems on which we all depend.
It was John Maynard Keynes, no less, who said that “Once we allow ourselves to be disobedient to the test of an accountant's profit, we have begun to change our civilization.” So I will end by really sticking my head above the parapet and suggesting that you consider some very serious mass disobedience!