The day I met with Richard Ellis, the front page of the free London newspaper Metro was dominated by news of the highest level of greenhouse gases recorded to date.
So it seemed fitting that we were talking about green issues and what the UK’s largest pharmacy chain is doing.
At well over six foot, Mr Ellis comes across as a gentle giant, but is at pains to point out a number of times that those who work in corporate and social responsibility (CSR) aren’t all tree-hugging hippies. Joining Boots five years ago, Mr Ellis was running his own company doing some work for the multiple when Boots approached him to come and work full-time for them as group head of CSR. Prior to running his own company, Mr Ellis worked for British Aerospace and had started life as a banker, getting involved in CSR in the early 1980s while at the now rebranded Midland Bank.
So how do you go about turning a large, multifaceted company such as Alliance Boots (AB) a darker shade of green?
Well, it helps that there has always been an element of ‘putting something back’ in the Boots heritage (see timeline right). From the founder’s son Jesse Boot providing allotments for staff to grow fruit and vegetables, to electric vehicles on the sprawling Nottingham site as far back as 1914, this kind of thinking has always been a part of the company. But that’s not to say that there hasn’t been work to do.
Mr Ellis is passionate about creating 100,000 ambassadors for CSR across the business – and this isn’t just in the UK. AB has employees in 16 countries, but all are following the same processes for measuring CSR, whether they are in Moscow or Milton Keynes. This culture of CSR is necessary because, as he says: “I can’t sit on everybody’s shoulder like a demented parrot saying ‘Remember CSR! Remember CSR!’.”
Heritage
Some of the ways Boots has begun to tackle the CSR agenda have been well publicised, such as the involvement with the Carbon Trust on carbon labelling. Work went into reducing the carbon footprint of products such as shampoo, but Mr Ellis worries that the labelling is actually confusing for consumers and so the logo doesn’t appear on Boots products.
Along with Walkers Crisps and Innocent Drinks, Boots was the first company to sign up to the carbon labelling scheme. But simply lowering the carbon footprint of a shampoo doesn’t have such a great impact on the other activities involved in hairwashing, as 93 per cent of the energy involved is used for heating water and powering the hairdryer.
But the CSR agenda isn’t just looking at the products Boots sells. It’s looking at the way it sells them.
Free-standing display units have been totally redesigned to be fully recyclable. Previously they had been made from card, nylon, string and plastic and could be shipped six on a pallet. They are now made from recycled material, can be recycled when their useful life is over, and can be shipped 20 on a pallet. This has saved the company £400,000.
A redesign of the trailers used by AB has created efficiencies and a significant saving in fuel costs. New trucks designed as a small lorry pulling a trailer (“wagon and drag”) create flexibility for transport options in inner city areas. The trailer is parked at an out of town superstore and the small lorry uses less energy for its trip into the busy city centre. Drivers undergo training to drive with greater fuel efficiency. And there are also pilots running with other retailers in the more remote parts of the country to share lorry space among non-competitors. This results in fewer lorries on the road, and the subsequent savings in fuel.
Carbon = cost
A key message for Mr Ellis is the win-win message that carbon equals cost. A good way of encouraging those in business to start to care about CSR issues is to make it clear that carbon reduction strategies often result in cost savings. “Once you start to be able to explain to people that carbon equals cost then what you can start to do is to think about how you can pursue a win-win approach and a win-win strategy.”
But for Mr Ellis, carbon isn’t what we should be worrying about – he thinks AB shouldn’t slavishly follow what customers think the issues are, but should be anticipating what’s coming and being prepared for that. With climate change a reality, this will have a dramatic effect on water levels in the world. Not only is water a major ingredient in many products, it is also fundamental in many manufacturing processes. However, the customer doesn’t want to change their lifestyle, but wants the trusted retailer to manage the agenda for them.
Private equity
What about the new set-up for the business? Aren’t private equity funded businesses looking for a quick-win, maximum returns over a short period approach? Well they often are, but that is far from the case with Stefano Pessina and KKR, says Mr Ellis.
He drew my attention to the Ethical Corporation blog which, when the news of the private equity deal broke, said that Alliance Boots would be a test case. Now that AB is a private company it doesn’t have to make public its annual review or CSR report, but it will be publishing its CSR strategy report on June 12. It’s all about being recognised for reputation, trust and transparency, says Mr Ellis.
The CSR report containing the numbers won’t be released until October, as AB doesn’t own the data for energy consumption (it belongs to the energy companies) and there is approximately a three-month delay in receiving this information.
Within AB there is now a CSR board that reports into the main AB board. This ensures CSR issues are not pushed to the end of long board meetings and dedicated time is available to develop strategy and monitor progress.
There is also a commitment from AB to continue with other activities such as entering the Business in the Community, Sunday Times Companies that Count survey. The results of this are published this Sunday (May 25).
But CSR isn’t just a matter for those attending the board meetings – there is a full tiered structure that involves everyone on the ground and progresses through responsibility levels up to director level. This ensures there are lots of people who, as part of their everyday roles, are responsible in some way for an element of CSR. A technique that could be applied in just about any pharmacy, Mr Ellis agrees. Split the duties up and make a different member of staff responsible – recycling paper and cardboard, ordering recycled paper prescription bags, checking the lights are turned off and replacing with energy saving bulbs, or organising a car share.
In order to gather robust data that can be measured in the same way financial data is measured, AB has a system in place called Credit 360. This operates in every country in which AB operates and collects data so that the CSR numbers can be managed.
Previously there had been 52 databases on different PCs across the company, but this new system allows Mr Ellis to import the data into one place. Credit 360 gives CSR data as much credence as financial data, and AB has taken the decision that CSR data has to be signed off by the financial director.
Critical friends
For its actions to stand up to scrutiny, and for it to learn how to improve what it does, AB has recruited about 20 ‘critical friends’ to work with it on different parts of the CSR agenda.
For example, the World Wide Fund for Nature will discuss AB’s use of chemicals in its products and manufacturing. Previously, Boots had been on WWF’s blacklist, but recently the two organisations gave a joint presentation on REACH (EU chemicals legislation). AB also works with Forum for the Future on products and packaging.
The message here is that the company is trying to be open – aware that not everything is perfect and that there’s plenty to do still – but working with critical friends gives AB the opportunity to identify the problems and act on that information.
Volunteering
But CSR isn’t all about green activities. Boots has a long history of volunteering – for 10 years Boots beauty consultants have been going into hospices and hospital cancer wards giving patients advice on how to look their best at a time they are probably feeling their worst.
Many of the Boots volunteering activities are for campaigns and causes that are relevant to its employees (79 per cent of whom are women) and its customers (83 per cent of whom are women), so an activity such as Breast Cancer Awareness Month is a natural fit for it to support. Pharmacists receive specific training on self-examination, Boots works with suppliers on special pink products, and beauty consultants do makeovers and ask for donations.
It’s clear that there is not one path for making your business greener and more socially responsible and that even the UK’s largest pharmacy chain doesn’t feel that it’s appropriate to go down that path alone.
But Boots is doing plenty of things that every pharmacy, from the smallest to the largest, could adopt. And you don’t have to be a tree-hugging hippy to be green.
Timeline
1849 John Boot opens first shop to sell affordable medicines to the poor
1914 Boots starts using electric vehicles on the Nottingham site
1925 Opening of the first Day and Night Store at Piccadilly Circus in London
1930s Introduction of its first recycling scheme
1941 Boots sets up a scheme to employ disabled people
1976 End of animal testing on Boots own products
1980s Job share: pioneer of family-friendly working practices
1984 Boots starts donating surplus products to charities
1996 Beginning of long- term partnership with Breast Cancer Care
2002 Boots starts working with the Carbon Trust
2004-05 Britain's fifth most socially responsible business, according to Business in the Community
