Skoll 10: Profit, promiscuity and risked lives as corporates enter social enterprise world

Retail giant Marks & Spencer (M&S) is making a profit through its commitment to social and environmental goals.

Speaking at the Skoll World Forum on Social Entrepreneurship yesterday M&S head of sustainable business Mike Barry said: ‘We’re trying to demonstrate that you can, in a mainstream way, make money while being better for the environment and society.’

Barry said that M&S’s commitment to sustainability – called ‘Plan A because there is no Plan B for the planet’ – was originally expected to run at a £40m loss but had only ever cost the company £20m, and that was in the first year of the programme.

Now in its third year it was delivering the company a £50m profit.

He said this came through efficiency savings, through the fact they were entering new markets in the effort to have people green their homes and through developing new partnerships.

In the latter case Barry gave the example of the M&S voucher scheme with Oxfam where people take their clothes to an Oxfam charity shop and are rewarded with a £5 M&S voucher. He said this idea had not come from the sustainability team management but from staff who had become inspired by Plan A.

‘These vouchers have a 55 per cent redemption rate rather than the two per cent redemption rate that comes with vouchers that are sent through the mail. By encouraging customers to make the effort to recycle their clothes we’ve seen a phenomenal increased redemption rate.

‘To me sustainability is about keeping customers loyal to you in a very promiscuous shopping environment.’

At the same time he said he was not afraid of other retailers using the same strategy.

‘What if Primark came up with a green product that undercut us? Great. That’s a challenge to us,’ said Barry.

He said that M&S was at the start of its programme and ‘at best’ had done 10 per cent of what it needed to do but added: ‘There is nothing we would not do, within reason, to improve our social and environmental sustainability.

‘Paying workers on the Indian sub-continent a living wage, as opposed to just a minimum wage, was seen as impossible in the competitive marketplace but six weeks ago we announced that we would be the first major retailer to help people in the Indian Sub-Continent earn a living wage and we will do it within five years.

‘We experimented in some of our factories and showed that you could pay a living wage by driving up productivity.’

The forum also heard from the chairman and CEO of Venezuelan rum company CA Ron Santa Teresa. Alberto Vollmer said his company had been pushed to take a more active role in society with the election of President Hugo Chavez and the subsequent danger that the company might be nationalised.

The 214 year old company launched Project Alcatraz working with gangs in its local area. The homicide rate has dropped from 77 homicides per 100,000 to 30 and Volmer said the rum company, which was already a household name, is now more known for Project Alcatraz than for its alcoholic product.

He said the project had been built into the brand and the company was now able to attract the best staff who saw their job as ‘24 hours not 9-5’.

He added: ‘The leader has to be committed. That means spending time, 20-25 per cent, maybe more committed to this project and that means going into where the gangs operate and that means risking your life – but if you don’t do that you don’t know how to govern where the organisation is going.’

Barry offered advice on where social entrepreneurs could operate. He said: ‘Traditional business is in silos with different industries, different countries, different disciplines. The money for you is to be made at the boundaries as they merge and collapse and as people bridge industries, bridge countries and bridge disciplines.’