Together, the world’s most powerful consumer brands have a lot of clout. The Consumer Goods Forum’s 400 members employ an estimated 100 million people and generate combined sales of €2.5 trillion.
The way these companies — including GlaxoSmithKline, Nestlé, Nike, PepsiCo, Unilever and Procter & Gamble — choose to do business has a massive effect on economies, lifestyles, habitats and the future of our planet; the impacts and ripples of everyday decisions are felt across the globe and for generations to come.
We’ve heard a lot of negativity about these mega-brands, but what’s going on behind the scenes, and how can the power they wield be used as a force for good? PQ speaks to Peter Freedman, MD of The Consumer Goods Forum, to find out.
Sustainable global business
Peter has met some very interesting people working on ‘some very tough issues’ over a career spanning retail, consumer goods and the public sector. He was drawn to The Consumer Goods Forum by its ‘unique’ board of directors; he believes that by working together they have ‘a pretty good shot’ at helping retailers and manufacturers collaborate in pursuit of better value for shoppers, and a more sustainable way of doing global business.
The Consumer Goods Forum has, in one way or another, been around since the early 1950s. The Forum we know today was founded in December 2009, following a merge between CIES, the Global Commerce Initiative (GCI) and the Global CEO Forum. It has evolved in several ways: membership is no longer restricted to retailers and is now open to retailers, manufacturers and service providers from all regions of the world, to ensure proper representation of the sector. Online retailers are also included in some of The Forum’s working groups.
On top of that, The Forum has become more focused on what it’s trying to achieve – to Peter, that’s better social and environmental sustainability and compliance, product and food safety, helping to empower the world’s population to live healthier lifestyles, wellness and driving efficiency in the industry’s supply chains.
Collective vs corporate action
But uniting 400 of the world’s super-brands in a common goal to drive sustainable business can’t be an easy task — particularly when many are in direct competition for market share. ‘You’re right’, Peter acknowledges, ‘many of our members do compete — in the sense that, for example, they might compete for market share in shampoo. But there are many arenas — sometimes called ‘pre-competitive’ arenas — where collective action as an industry makes more sense than individual corporate action.’
One example is deforestation; The Forum has a board resolution on achieving zero net deforestation by 2020, which it aims to achieve through the responsible sourcing of key commodities such as soy, beef, palm oil and paper, so that tropical rainforests aren’t depleted.
‘It’s a big task’, Peter admits, ‘but we continue to work with our members, providing guidance and supporting those who seek early adoption.’ Another example is food safety — an issue that Peter says everyone, shoppers and the food industry alike, ‘cares about deeply’. ‘As an individual retailer or food manufacturer there’s a limit to what you can do about food safety’, he says. ‘It involves working with hundreds of thousands of upstream suppliers, service providers, governments and others — on a global basis. In both our food safety and zero net deforestation goals, our members understand that there are limitations to what they can achieve individually, and that collective action can make a big difference. There are many other arenas where such collective action makes sense.’
According to Peter, The Forum’s members are constantly ‘on the alert’ for issues that might require collective action; they can be stimulated by external stakeholders or internal discussions with corporate members in industry-level meetings. Sometimes The Consumer Goods Forum will surface an issue based on forward-looking research, but ultimately its board decides on the priorities. ‘The board consists of the CEOs of 50 of our members’, explains Peter, ‘so obviously they are going to focus on CEO-level issues. They usually then apply three simple tests: is this an issue that needs collective action, does it need global, rather than national or regional, leadership and would it benefit from manufacturers and retailers working together? These three criteria determine whether an issue is one to which The Forum can bring unique value.’
Once a priority has been decided, The Forum will try to set a simple goal, which may then be formalised into a board resolution and ultimately even a formal commitment. Then working groups of members are set up to make something happen. All quite straightforward, then? ‘No’, Peter assures me, ‘it isn’t!’
Still, one recent example of where the board has really come together is in its public call to action on climate change. In June, it issued a statement that called on heads of state across the world to engage and act with determination, leadership and ambition to secure an ambitious and legally binding global climate deal. At the same time, The Forum also reaffirmed its own commitments to two sustainability resolutions: achieving zero net deforestation by 2020 and phasing out HFC (hydrofluorocarbon) refrigerants from 2015.
‘I have been struck by how many CEOs really do care about the issues we focus on’, Peter says, ‘and it goes way beyond a “tick the box” interest in what they used to call CSR. That doesn’t wash any more. Our members are passionate about the issues we cover and they know they can contribute; they can shape the future of an industry that will have an impact on the lives of billions of people. The Consumer Goods Forum is the platform where their vision for this industry comes to life.’