Transcript Slide 1

Campbell’s Benchmarking Analysis
May 12, 2009
Executive Summary
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We analyzed the CSR activities of ten companies, nine of which are involved in
food and beverage manufacturing
The activities of the companies were evaluated according to Campbell’s CSR
pillars, plus one additional category and included: sustainability, supply chain,
consumers, community and workplace
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Although there are a few exceptions, based on our research most of these
companies are not disclosing specific quantifiable targets for their CSR
programs
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Focus of the analysis was on looking for specific targets and goals that the
companies are setting for themselves as well as any metrics they are disclosing to
track their progress
We have also highlighted the primary ways that companies are implementing their
goals as well as select initiatives and key past achievements
The exception is in the area of sustainability where we found companies were much
more likely to have specific goals and to publicly report key tracking metrics
Methodology
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We evaluated the public disclosures of these companies including CSR reports,
websites, press releases and news articles
All the analysis is based on publicly available information
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Sustainability Summary
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Environmental sustainability has major implications throughout the corporate
value chain as climate change will affect raw materials and other supplies,
especially H2O & agriculture
Goal Setting
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Implementation Trends
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Baseline goals primarily in water, energy, HFC’s, waste streams, packaging material
Leaders are setting goals in areas such as GHG emissions, product carbon
footprinting, renewable energy, reusing waste streams in production, sustainable
resource extraction, REC’s, and offsets
Goals tend to be vague on GHG emissions but explicit on water, energy, & packaging
Targets are a percentage reduction from a baseline year instead of actual quantities
Stakeholder partnerships—industry, public-private, NGO, non-profit
Sustainability management teams, policies, capital expenditure reviews
Reporting, transparency and third-party certification of reductions and assessments
Challenges in Interpreting Sustainability Goals
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Potential policy implications and changing technology trends
Plant, division, or organization-wide targets? Domestic or non-domestic?
Is a 10% reduction by 2010 better or worse than a 15% reduction in 2015?
Sustainability Highlights
Best in Class
Targets / Goals
• ISO 14001 certification for all factories by 2010 (Nestle)
• 20% reduction in GHG emissions from existing stores by 2012 (Wal-Mart)
• Review of “Scope 3” GHG emissions – optional, indirect emissions in
WRI’s Greenhouse Gas Protocol (ConAgra)
• 20% reduction in electricity consumption per unit by 2015 (PepsiCo)
• 15% reduction in energy consumption rate by 2010 (General Mills)
• 100% renewable energy goal (Wal-Mart)
• Open first-ever "net zero" plant that runs almost entirely on renewable
fuels and recycled water by 2011 (PepsiCo)
• 20% reduction in water consumption per unit by 2015 (PepsiCo)
• Return all water used for manufacturing processes back to the
environment at a quality level that supports aquatic life and agriculture by
the end of 2010 (Coca-Cola)
• Zero waste production with a 25% reduction by October 2008 (Wal-Mart)
• 25% more efficient truck fleet in 3 yrs; 100% more efficient fleet by 2015
(Wal-Mart)
• Plans for six new refrigeration plants to further reduce 80 tons of R-22
(HCFC) (Nestle)
Metrics
• Organizational carbon footprinting – metric tons CO2 equivalent GHG
emission – for scope 1 direct emissions and scope 2 indirect emissions
from electricity usage (ConAgra)
• Transportation GHG emissions by type (ConAgra)
• Individual product LCA (lifecycle assessment) (PepsiCo)
• Renewable Energy Certificates (RECs) purchased (PepsiCo)
• Total water discharge; water discharge load (Nestle)
• Air acidification potential (Nestle)
• Ozone depletion potential (Nestle)
• By-products for recovery (Nestle)
• Assessment of relative water availability (abundance, stress, scarcity)
(PepsiCo)
• Waste for disposal vs. repurposing (Coca-Cola)
Baseline
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GHG emissions reduction
Electricity reduction targets
Non-renewable energy reduction
Increase % energy from renewable sources
Water usage reduction targets
Meet wastewater standards
Reduction of packaging material
Solid waste reduction
HFC reduction from refrigeration units
Increase transportation fleet energy efficiency
Energy-efficiency and “green” criteria in
design of new production facilities
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Total energy consumption
% of renewable energy
Electricity usage
Natural gas usage
Water conserved from initiatives
Water use / total water withdrawal
% packaging materials renewable vs. nonrenewable
% packaging materials recyclable vs. nonrecyclable
Landfill Waste Reduction
Solid waste generated
Recycling rates
Packaging material reduction
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Sustainability Highlights
Best in Class
• 5-acre solar concentrator field  ¾ heat used in Sun Chips manufacturing
(PepsiCo)
• First substantial purchase of clean fuel sources to provide up to 15% of total
energy for about 360 Texas stores and facilities (Wal-Mart)
• Sustainable fashion line made from PET bottles; has sold more than 1M
(Coca-Cola)
• 22% decrease in water usage for the past 4 years (Sara Lee)
• Partnership with Associated Packaging Technologies: new technology cleans
recycled plastic for use in frozen meal trays (eliminates 8M lbs of landfill
waste/year) (ConAgra)
• Redesigned popcorn packaging; improved pallet efficiency by 25%, reducing
Scope 3 CO2 emissions by more than two million pounds (ConAgra)
• Increased rail shipments; more than 1.6M gal diesel fuel/year saved since
2006 (Kellogg)
Implementation
• Producer of fireplace logs turns Nestle's spent coffee grounds into “Java
Logs” (Nestle)
• Investor in world’s largest PET bottle-to-bottle recycling plant in 2007
(Coca-Cola)
• 142 hybrid electric trucks on the road by end of 2008; the largest heavy-duty
hybrid electric delivery fleet in North America (Coca-Cola)
• Wal-Mart’s Greenhouse Gas Network---measuring, reducing and eliminating
the use of fossil fuels from stores, supply chain and customers (Wal-Mart)
• Sustainability criteria considered in all capital expenditure over $5M (PepsiCo)
• Life Cycle Assessment of NaturNes baby food container resulted in substantial
energy reductions from packaging switch (Nestle)
• Use waste to generate power for local communities (Sara Lee)
• Biogas from wastewater treatment plant as fuel for boilers (Kellogg)
• Fleet GPS tracking & speed controls; 5% increase in fuel efficiency (Kellogg)
• Employee-led "tag and flag" programs, such that leaks on production lines
are immediately addressed (PepsiCo)
Baseline
• Optimize pallet efficiency by assessing
product packaging
• Use of post-consumer recycled material
• Eliminating GHG’s as a propellant
• Reduced packaging weight and inputs
• LEED certification for new production
facilities
• Use of organic waste as animal feed
• Use of organic waste as energy source
• Greatly reduced HFC in refrigeration
units
• EPA's Energy Star program
• Reducing energy needed for
production
• Conversion to energy-efficient lighting
• Sustainability officer & leadership teams
• Creating sustainability tools for
employees and systems to measure and
reward improvement
• Integrated environmental management
systems, centrally managed
communicate best practices
• Reclaiming and reusing waste streams
• Reporting leaks and production
inefficiencies
• On-site co-generation power
production
• Membership in Grocery Manufacturers
Association/Food Products Association
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Supply Chain Summary
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To succeed in the marketplace a company needs to reflect diversity in its
supplier base and practices that represent its employees, consumers, retail
customers and communities
Diversity
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Safety, Health & Quality
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The standard is to have a comprehensive supplier code of ethics to encourage best
management practices and industry standards for required safety, quality,
traceability, nutritional content and continuity of supply
Those taking it one step further are training their suppliers in this area and sharing
best practices with them
Metrics
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At a minimum, sourcing initiatives should be based on supplier diversity
Leaders will detail specific quantifiable dollar amounts purchased from minority- and
women-owned businesses (Con Agra)
Most companies keep inventory of products and manufacturing
Leaders provide support through a supplier ethical data exchange (Pepsi)
Reporting, Auditing, & Monitoring
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Requirements for supplier certification is fairly commonplace for most organizations
Best in class have independent ethical audit firms test compliance
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Supply Chain Highlights
Best in Class
Baseline
Targets / Goals
• Increase spending on minority and women-owned businesses
(Kellogg)
• Long Term, 100% traceability of all mining products; all jewelry
poly-bags (i.e., packaging) to be bio-degradable and convert all
pallets and all boxes to recyclable materials (Wal-Mart)
• Incorporate sustainable agriculture into
procurement of ingredients – ensure industry
standards for required safety, quality, traceability,
nutritional content and continuity of supply
• Increase selection of suppliers certified in
resource conservation (e.g., EPAs Energy
Star/Climate Leaders; Carbon Disclosure Project;
Forest Stewardship Council; Rainforest Alliance)
• Encourage Best Management Practices
• Set a Supply Chain Guide to ensure business
ethics
• Promote supply chain diversity
Metrics
• Specific annual dollar purchases from minority- and women-owned
businesses (ConAgra)
• Breakdown spending by items such as packaging,
food ingredients, contract manufacturing
Implementation
• Supplier Ethical Data Exchange (PepsiCo)
• Use third party ethical sourcing audit firms to test compliance
against the standards contained in the Code (PepsiCo; General Mills)
• Formalizing Global Sustainable Agriculture Policy, defines
sustainable approaches across agricultural supply chain (PepsiCo)
• A more comprehensive Supplier Code of Conduct, which requires
adhering to appropriate standards in human rights, labor rights,
environmental sustainability and anti-corruption (General Mills;
Coca-Cola; ConAgra)
• Internal audits of suppliers’ facilities, review of their third-party
audits, adherence to health, safety & quality guiding materials, and
monitoring of initial and on-going shipments (Sara Lee; Coca-Cola)
• Provide farmers around the world provided with free technical
assistance and advice (Nestle)
• Member of the Carbon Disclosure Project’s Supply Chain
Leadership Coalition (PepsiCo)
• Sourcing initiatives based on supplier diversity
• Shares agricultural best practices with growers
• Purchase fresh organic products from local
suppliers
• Ethical Standards team
• Train suppliers to ensure compliance with Code
• Conduct surveys to improve their services
• Recognized supplier certification, such as :NMSDC
Regional Council; Women's Business Enterprise
National Council (WBENC); or a recognized
governmental organization
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Consumer Summary
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Goal is to meet consumer demand for healthy food
Some companies have chosen to treat each product in isolation while others
have made an overall assessment of all products
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Companies such as Kellogg, have yet to develop indicators and targets,
achievements therefore appear vague
Cross-cutting theme across companies – improve nutritional value of products,
nutrition labeling, increase environmental awareness
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Reduce sugar, salt, total fat and trans fatty acid
Limited advertising to children
Smart Choices program
Carbon footprint
Quality Control
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Heinz lists achievements by product and notes geographical locations
General Mills, Nestle and Coca-Cola report on overall achievements
Product testing, Allergen control, Traceability
Improve Nutrition
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Heinz Micronutrient Campaign – Consistent so impact can be measured over time
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Consumer Highlights
Best in Class
Targets / Goals
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Reduce sugar by 5% over 5 years (Nestle)
Reduce salt by 25% over 5 years (Nestle)
Reduce total fat by 3% over 3 years (Nestle)
Reduce saturated fat by 1% over 3 years (Nestle)
Reduce trans-fatty acids - <1% total energy (Nestle)
Reduce calories, fat, saturated fat, sugar or sodium content by 10% (General Mills)
Increase nutrients by 10 percent (General Mills)
No advertising or marketing directed at children under 6 (Nestle)
Local purchasing power measured for low-income consumers (Heinz)
No advertising to children if more than 12 grams of sugar per serving (General
Mills)
• Micronutrient Campaign (Heinz)
Baseline
• Nutritious foods to combat obesity
• Responsible marketing and
advertising
• Food package safety
• Reduced portion sizes
• Nutrition labeling
• Affordable food for all income levels
• Humane treatment of animals
Metrics
• Salt, sugar, total energy per ton (Nestle)
• Food safety elements
Implementation
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• Labeling
• Advertising
• Consumer awareness of carbon
footprint
• Nutritious foods to combat obesity
• Food safety
• Quality Control
Smart Choices program (General Mills)
Children’s Food and Beverage Advertising Initiative (CFBAI) (PepsiCo)
80% of consumers aware of carbon footprint through labeling (PepsiCo)
Reduced sugar by 17% (2003-2007) (Nestle)
34,200 tons of trans fatty acid reduced (2003-2007) (Nestle)
More than 95% of portfolio converted to 0 grams trans fat per serving (Kellogg)
No salt-added and reduced sugar ketchup (Heinz)
6800 tons of salt reduced (2005-2007) (Nestle)
100% natural ingredients used in Plasmon baby food (Heinz)
Pasta meals fortified with Omega-3 (Heinz)
Hazard Analysis and Critical Control Points (HACCP) system (Sara Lee)
Implemented at each plant – annual review of food security plan (PepsiCo)
Training programs, product testing, traceability, allergen controls (PepsiCo)
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Community Summary
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In general companies have chosen to focus on nutritional and environmental
programs
Limited metrics – mostly measured by philanthropic contributions
Companies have partnered with:
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Nutritional initiatives primarily focused on:
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Delivering alternative solutions to overcome malnutrition
Food bank programs to tackle hunger
Environmental initiatives primarily focused on:
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Nonprofit organizations help them to reach out to those in need
Universities and Think Tanks to conduct R&D for new products
Environmental Experts to develop innovative solutions to protect the environment
Water: Coca-Cola and PepsiCo
CO2: Coca-Cola
Waste: PepsiCo, Sara Lee
Land (soil disruption), preservation of historic sites and loss of biodiversity: Wal-Mart
Volunteerism and matching-grant donations
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Most of companies encourage their employees to volunteer and make donations to
programs they support
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Community Highlights
Best in Class
Baseline
• Contribution of 5 % of pretax profits to charitable causes (General Mills)
• Environment Protection:
Targets / Goals
– 35 million over 10 years to conserve wildlife habitat (Wal-Mart)
– Water and Sanitation: pledged $3.5 million for 3 years to safe water initiatives Ghana,
India, and Bangladesh ; $6 million three-year community-based activities to develop
practical solutions across water, agriculture and climate (PepsiCo)
– Water: to plant more than 3 million trees by 2012 (Coca-Cola)
• Micronutrient Campaign:
– Grants and projects, pledge of $5 million grant over the next five years (Heinz)
– Invested CHF 30 million a year on research into shelf-stable, milk-based products
(Nestle)
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Promote nutritional programs
Encourage physical activity
Develop environmental initiatives
Incentivize employee volunteerism
Charitable contributions
• Malnutrition and obesity programs targeting children and adolescents of lowerincome families (Nestle)
Metrics
• Number of beneficiaries from the program (Heinz and Nestle)
• Measure by the amount of money
donated for philanthropic causes
• Matching-grant donations
• Nutrition:
– Investment of CHF 30mm to milk substitute products for lower income children
(Nestle)
– 400,000 Indonesian children have benefited from the Micronutrient Program (Heinz)
– 166 million of pounds of food for poor families (ConAgra)
Implementation
• Health and Education:
– $2.5mm to HIV/AIDS in Africa, Malaria initiatives; and awarded more than $14mm in
scholarships to support students who are the first in their immediate family to go to
college (Coca-Cola)
• Environment:
• Micronutrient products to attend
lower income families
• Conserve wildlife habitats
• Hunger elimination programs
• Promote volunteerism among their
employees
– Pledge $3.5mm to implement safe water initiatives; Frito Lay and Tropicana:
Minimizes landfill waste (fertilizers) (PepsiCo)
– Partnership with USAID and committed an investment of $13.8mm on water
initiatives (Coca-Cola)
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Workplace Summary
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Companies have focused their workplace programs on attracting and retaining
talented employees to enhance their competitive position in the marketplace
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Workplace programs are focused in four key areas:
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Ensuring diversity of the workforce thereby bringing a broad range of talents and
perspectives to the business
Helping employees achieve both personal and professional development
Ensuring the health and safety of employees both at home and at work
Ensuring that employees have a fair work environment
Very few companies are communicating concrete targets for workplace related
programs with the exception of select safety related targets
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Happy and healthy employees are more productive at work and are capable of
contributing more to their families and communities
Baseline metrics primarily focused on accidents and injuries and diversity of
workforce
Some of the most progressive workplace programs are focused on providing
greater opportunities to employees outside of the U.S. and on encouraging
healthy lifestyle choice for employees
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Workplace Highlights
Best in Class
Targets / Goals
Metrics
Implementation
• Create job opportunities for people with disabilities (PepsiCo)
• Develop local talent and increase representation of local managers
in developing country facilities (Nestle)
• Help employees to improve diets, increase physical activity, quit
cigarette smoking, and limit alcohol consumption (Heinz)
• 100% compliance with all applicable health and safety rules
(ConAgra)
• Reduce lost-time injury rate by 25% over five years (General Mills)
• Certification of all factories against OHSAS 18001 by 2010 (Nestle)
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Positions internally filled (director level and above) (ConAgra)
OSHA inspections, citations and settlements paid (ConAgra)
Local management committee members native to country (Nestle)
Number of employees receiving formal classroom training in
developing countries (Nestle)
• Number of employees with potential to fill Key Business Positions
(Nestle)
• Implementation of paternity and domestic partner benefits
(ConAgra)
• Provided HIV/AIDS health care programs to approx. 60,000 Africa
system associates, as well as spouses and children (Coca-Cola)
• Employee turnover is less than 5% per year (Nestle)
• Lost Time Injury Rate has fallen by 70% in last 5 years (Nestle)
• Provide flexible work arrangements (General Mills)
• Assessment of ethics and compliance areas to identify the most
significant risks for the company and to mitigate through
appropriate policies, training and control mechanisms (Sara Lee)
• Week of additional pay for employees with 20+ years of service
(Wal-Mart)
• Matching employee giving programs (Heinz, PepsiCo)
Baseline
• Increase workplace diversity through:
– Increasing the number of women in
management
– Increasing the number of minorities in
management
• Invest in employees’ professional development
• Reduce employee turnover
• Provide a safe and fair working environment
• Encourage health and wellness of employees
• Raise employee satisfaction
• Size of total workforce by geography
• Women in the workforce: % total, and % in
management
• Minorities in the workforce: % total, and % in
management
• Incidence and injury rates
• Turnover rates
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Employee networks and mentoring programs
Employee surveys
Employee health and wellness programs
Develop Employee Rights policies and translate
into local languages
• Training and tuition assistance programs
• Formal compliance / complaint mechanisms
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Conclusions
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Most companies in our analysis are not publicly disclosing specific quantifiable
targets for their CSR programs focused on their consumers, employees, supply
chains or communities
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Environmental sustainability is the one area where most companies are
publicly communicating specific goals and providing data on past
performance
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Select companies are providing leadership in individual categories such as WalMart’s supply chain goals or Nestle’s consumer targets, however no company in
our universe seems to have undertaken a broad and systematic approach to
addressing all these areas
We believe that setting specific goals and providing concrete metrics on achievement
is required as a minimum to be seen as proactive in this area
Most companies are communicating to shareholders and stakeholders about
their CSR activities through dedicated pages on their websites and separate
CSR reports
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A few companies are working to integrate some of their CSR communications with
their broader shareholder communications such as publishing their CSR report at the
same time as the company’s annual report
We believe that providing reports on a consistent basis is required as a baseline
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Recommendations
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We believe that Campbell’s could be an industry leader overall by taking a
systematic approach to addressing all these categories
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Provide a few specific and time bound goals in each pillar
Report quantifiable progress towards achieving those goals
Report similarly for all pillars on a consistent basis
Additionally we see a number of areas within the five pillars where we believe
Campbell’s could exercise leadership as well, such as:
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Sustainability: publicly releasing the individual totals from the lifecycle greenhouse
gas assessment of multiple Campbell's products
Supply Chain: setting targets for working with minority- and women-owned
suppliers; formally training suppliers to ensure that they are well informed on best
practices; and having an independent auditor monitor and report on supplier
compliance
Consumer: selecting one nutritional issue and designing a program to address the
issue in question (e.g. Heinz Micronutrient Campaign)
Community: reporting more quantifiable metrics than philanthropic giving; investing
in programs linking children’s nutrition and education
Workplace: focusing on employee development such as workplace training and
tuition reimbursement and tracking and reporting metrics on these programs
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Appendix
Campbell’s Definitions
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Environment: Lead the Food Sector in Environmental Stewardship
– Drive sustainability; Water Stewardship; Energy Management and Carbon
Footprint; Sustainable Packaging and Waste Minimization; Agricultural
Innovation
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Consumers: Deliver on the Consumer Promise
– Wellness and Nutrition; Food Safety and Quality; Strategic Partnerships;
Authentic Nourishment; Helping the Consumer be more Sustainable
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Society: Nourishing our Neighbors Everywhere, Every Day
– Resolute commitment to our communities; Partnering to address Wellness,
Nutrition and Hunger; Signature programs with Social Impact
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Workplace: An Extraordinary Workplace where Employees Drive CSR
Innovation
– Engagement measures embrace CSR; Model of Diversity and Inclusion;
Benchmark for CSR Integration
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Supply Chain: Expectations, Best Practices, and Score Cards
– Suppliers, Manufacturers, Distributors Customers, Consumers
Contact Information
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Cimarron Nix: 720-951-0051 [email protected]
James Marshall: 646-391-1186 [email protected]
Shannon Mullins: 646-300-5508 [email protected]
Elen Portero de Paula: 646-942-3015 [email protected]
Harriette Williams: 704-807-0759 [email protected]