Marks & Spencer - how do its new promises shape up?

Date: 12 Mar 2010

British retailer Marks & Spencer used to be best known as a pillar of the establishment. No fiery wild-eyed radical, it would do a select number of good things for the community, and it would steadfastly refuse to beat its own drum about it. All that has changed, and the measure of just how much could be seen with the retailer's recent pronouncement that it is aiming to become the world's most sustainable retailer by 2015.

In the hands of some companies, such promises would be seen as pure rhetoric. M&S has done enough over the last three years - since it first introduced its 'Plan A' action plan - to be taken seriously.

Besides, very few companies will even tread into this kind of territory. If you asked the majority of CEOs whether or not they aspired to be the most sustainable company in their sector, most would ultimately concede that they didn't.

Not that they would want to be unsustainable. They just don't want to put themselves out in front. It's too exposed. There are too many people determined to catch you out. Much more comfortable to be near the head of the pack, but very much with the pack.

So when a company with the seriousness of purpose of M&S declares this to be its intent, it is news.

Of course, 'world's most sustainable retailer' is a relative term - there is no one benchmark of what it takes to achieve, and it is not a stable destination that stands still once you get there. Nevertheless, there must be some serious actions to deliver on this short term, so it's worth just looking beneath the surface to see what these are.

The most intriguing of the company's new promises focus on its relationship with its customers.

First of all, it says, it intends that all of its products will have "at least one Plan A quality by 2020". That is, by the way, an awful lot of products. 2.7bn to be precise.

What does it mean, to have a Plan A Quality? In most cases, it will be a "well recognised external environmental and sustainability standard. For example, fish products from a Marine Stewardship Council (MSC) source."

This would, in itself, put Marks & Spencer into a different league to its competitors, assuming none of them could match the promise by the same deadline. It is true, of course, that having one externally recognised mark of social or environmental quality is not the same as every product being fully sustainable. The fact that such an ambitious undertaking - which will be a struggle to achieve by the deadline - might be dismissed by some as not sufficiently ambitious is simply an indication of how far we have to go to achieve sustainability.

The other commitments relating to customers are ... interesting. Potentially revolutionary, and potentially mundane. The devil lies in the delivery.

The second promise is that the company will help its customers to "make a difference to the social and environmental causes that matter to them". It will do this by supporting causes with charitable donations and cause related marketing partnerships. The target - £15m per year - is respectable. But it is, ultimately, just about giving away money. I hate to describe it as mundane - obviously it is about not just the cash but engaging customers in the causes as well.

M&S found new ways to do this when it provided incentives for customers to take their second hand M&S clothes to Oxfam. It was a clever device which was about engaging and mobilising customers. That made it more interesting than simply giving cash. Are there more of these to come?

The third promise is that it will "help our customers live more sustainable lives". The idea of companies that have a strong relationship with their customers using their influence to change people's behaviour is a very exciting one. But what does it mean in practice?

We don't really know. Customers will be encouraged to create their own 'My Plan A'. That could be interesting - or just a gimmick. They will be encouraged to act differently via a continuous programme of plan A marketing communications. Social marketing, in other words. This has to be handled incredibly carefully. Even loyal M&S customers won't want to feel preached at or told how to live their lives.

But a really smart campaign ... well, it could be important.

Other areas of note - one of the new Plan A objectives is to integrate the approach throughout the company's systems and processes. Of course, everybody says they aim to do that. So what does it mean?

Well - some very interesting things. The successful delivery of Plan A will become part of the bonus plan for the management, for instance. The company is intending to introduce an "internal price of carbon" - presumably to create a set of incentives within the business to go with lighter carbon options. That is something I haven't heard attempted before, and it would be interesting to see if a model can be developed that makes it work without creating perverse incentives.

Because that's the problem with a lot of this "incentivising the right behaviours" stuff. As soon as you incentivise something, you change it. And if you don't get the incentives exactly right, you can find that you actually end up with counter-productive results.

If you are a supplier to M&S, this is going to be your revolution as well. All the company's food suppliers will be measured on social and environmental issues, with an aim that at least 25 percent will achieve a top level of performance for these by 2015.

All 10,000 farmers who supply the company will be part of its Sustainable Agriculture Programme by 2012. Agriculture, of course, faces some of the biggest challenges on climate change in coming years with areas such as meat production under pressure from the sector's contribution to emissions.

These are just key highlights. There are a lot more detailed commitments. Such as free home insulation for employees to help them cut their own carbon footprint. And biodiversity action plans for all new store construction projects.

The timing of the announcement of the new Plan A is in itself significant. Sir Stuart Rose, the CEO that has overseen the beginning of this process alongside a general revival in the company's fortunes in the high street, is stepping aside. Whilst he takes the chairmanship, a new CEO takes up the reins - Marc Bolland, formerly of competitor Morrisons.

Leadership matters, and it takes a CEO with courage, vision and commitment to head up an operation that manages to get into the media spotlight as often as M&S does - and to retain the high level of ambition and commitment for sustainability as it has. That the commitment level is ramping up must at least be an indicator that Bolland is clear that this will be part of the delivery package, and not just some momentary aberration that characterised Sir Stuart Rose's tenure.

One assumes that some of the other retailers will not be happy to sit idly by and to allow M&S to bag the 'most sustainable retailer' mantle. It would be good if we saw some competitive pressure brought to bear on making real progress on social and environmental issues.

It may well be that M&S, once that most respectable and quiet of retailers, has just made the act of seeking front-runner status a mainstream thing. That could even turn out to be its biggest contribution to change.

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