Leaders
Your monthly round-up of the companies making it happen
For Alliance Boots, sustainability is at the heart of the business, says Richard Ellis, group director of corporate social responsibility
“Holistic” is a word that Richard Ellis, the group director of corporate social responsibil- ity at Alliance Boots, uses a lot when describ- ing the enormous international pharmacy and health and beauty product retailer’s approach to sustainability. Rather than treating envi- ronmental and social impacts and activities as a separate strand of business operations, Alliance Boots has chosen to incorporate sus- tainability into every aspect of the way that the company is run from day to day. “Our company can point back to the 1850s, when we were getting customers to bring medicine bottles back so we could wash and reuse them, although it wasn’t called recycling back then. Sustainability is an ethos that runs through the heart of the business. We haven’t suddenly discovered this agenda. Our heritage makes it easier for me to do what I’m doing – embedding sustainability into people’s jobs. “We’re not like some of the other busi- nesses that have discovered this agenda over the last two or three years – I’m not knocking them, but for them to be taken seriously they perhaps have to have been doing some of this stuff for as long as we have.
“For us it is key that instead of having dedi- cated budgets and dedicated teams of people working on CSR, we rely upon everybody understanding that this agenda is simple.” Ellis compares Alliance Boots’ approach to that of supermarket chain Marks & Spencer and its Plan A programme. He says: “We have a very opposite way of thinking to M&S. They have the Plan A team, which has lots of resources in terms of both people and cash. “They tend to pick up funding of specific projects, while what we endeavour to do is embed these activities in everybody’s daily work life. That means people don’t tend to abrogate their responsibilities – everyone sees the sustainability agenda as being their responsibility. We encourage people to bring their home behaviours into the working envi- ronment. They are used to recycling at home, to turning off the lights – doing things to make the world a little bit better.” Rather than making investments specifically in sustainability initiatives, Alliance Boots
16 | Sustainable Business | January/February 2012
tries to incorporate spending on improv- ing environmental performance into existing budgets. Ellis says: “If a store is going to be refurbished, we incorporate some of the latest sustainability gadgets and gizmos to make the store more energy efficient.
“Because there is a rolling programme of refurbishments, there isn’t a dedicated energy efficiency budget. If there is a separate sustain- ability budget, when trading is difficult – as conditions are now – everyone will have their budgets cut, including the CSR department. “But were still refurbishing stores, making decisions about updating our transport sys- tems, still making choices about the materials we use in the products we make.” Alliance Boots also has a dedicated board- level CSR committee, which meets every quarter to consider sustainability issues. “That means issues that need to be reviewed are
reviewed at the highest level, and rather than being tacked onto the end of a busy agenda, they’re part of a dedicated CSR discussion. “So the board is able to really consider very carefully the decisions we need to make as a business. Our view is we have to start to take cognisance of the long-term agenda, even though trading is quite tough.”
For many sustainability actions, the level of investment required will meet Alliance Boots’ ’internal investment hurdle rate’. But where return on investment is less clear, the company does have ringfenced funding. Ellis says: “This goes back to a board decision made in 2008 where it was agreed that for 12 years £5M per annum would be ringfenced to fund activi- ties in the world of sustainability and carbon reduction, where we see a genuine benefit but investment wouldn’t meet our rate of return requirements. If we can’t manage an invest-
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