Richard Ellis likes to pose questions. The director of corporate social responsibility at Walgreen Boots Alliance might query the cost of the journeys made by lorries returning empty to their depot, or he might ask an app developer whether a global warning system is possible, that tells sunbathers anywhere in the world what factor sun lotion should be applied at that moment in time or to alert asthma sufferers about air quality that day.
Ellis concedes he does not always have the answers to the questions posed, but as the head of a two person department for the NASDAQ-listed company, which operates across 25 countries, he needs to get more colleagues thinking about issues such as these, and to take ownership of the problem.
Ellis can’t physically make sure each of his 400,000 plus colleagues turn off the lights when they leave for home, say, but he can ensure that enough ‘ambassadors’ understand the issue, and persuade their co-workers to think about the energy waste, and act accordingly.
‘I challenge them. I throw out the idea,’ he says. The transport director might start to think about sharing empty space with other distributors, or even ensuring lorries return to the depot filled with rubbish from the stores that can then be properly recycled. ‘It produces a response, which is usually a corporate social responsibility one. I’m pushing on an open door. I like to talk to people to get them to think differently about things.’
It is also up to Ellis to query the provenance of the ingredients of all products stocked by the group. Knowing the source of cotton is increasingly important, he points out, because many wholesalers in Turkey, Europe’s second biggest supplier, source their products from ISIS-controlled lands. Products from Afghanistan are also troublesome, as the Taliban is known to use enforced labour. And customers popping in to buy a tuna sandwich want to know the fish has been humanely caught.
Such minutiae might seem like an exhausting box-ticking exercise, but get a detail wrong and it could hit the front pages, causing immense damage to a company’s reputation. ‘People are increasingly aware of issues, such as where the products are sourced, how they are sourced. Are children involved in the manufacture or production? Has the rainforest been affected?’ he says.
‘But how do we prove that we care about these things, rather than offering nice platitudes. How do we prove our paper is sustainable? Or where we source palm oil? How do we quantify the impact of our actions?
‘We have to be sure that the words in our annual sustainability reports are an accurate reflection of our business. We have to get our claims audited. If you are economical about the truth, the reality is that you will get caught. There are external stakeholders watching and challenging what we do.’
Non-governmental organisations are increasingly powerful, and well-informed. ‘You need to have a dialogue with them,’ says Ellis. Sometimes they have specific agendas that they are following, but they often have on-the-ground insight that can inform and shape corporate behaviour.
Collaboration can be useful, he explains. ‘The corporate social responsibility agenda has come of age,’ says Ellis.
‘Take the UN Sustainable Development Goals [17 goals ‘to transform our world’ ranging from alleviating poverty, to responsible consumption and production, to establishing partnerships between governments, private sector and civil society]. I don’t think that any individual would not say that they articulate a world that we would all like to be part of. Businesses have a role to play in global society. They need to become good corporate citizens.’
There is also evidence that people want to work for companies that they deem to be good corporate citizens. Employees want to make a difference. An initiative that has played well with employees across Walgreens’ American network is the Get a Shot, Give a Shot scheme, which launched in 2013. For every flu vaccine or immunisation shot administered in its chemists, Walgreens donates the cost of a life-saving vaccine for children in the developing world. In the first three years, it donated more than 15 million vaccines.
Ellis explains the scheme has many benefits. Staff are proud to be associated with it. Customers actively seek out Walgreens for their flu jabs – their numbers have doubled in three years. It has generated more media coverage ‘than anything else we do’. The scheme has also been endorsed by the Global Alliance of Vaccines and Immunisation (GAVI), a public-private global healthcare foundation, and works in association with the UN Shot@Life campaign.
Indeed, so successful has the scheme been that last year Walgreens recommitted to another three years.
But Ellis also points out: ‘It has a strategic relevance.’ Making abstract concepts relevant to an individual is important. The ‘circular economy’, in which resources are used for as long as possible, during which time the maximum value is retrieved, before being recycled or regenerated, can be difficult to understand. But Boots found a way to bring this concept to life for its colleagues and customers in partnership with pharmaceutical giant GSK and its ‘Complete the Cycle’ initiative.
Asthma sufferers are encouraged to return their used inhalers to stores, which are then collected by GSK, who works with suppliers to recycle some parts and to convert those non-recyclable parts into energy. Prior to this initiative, four in ten used inhalers would reach landfill.
Reducing the amount of waste that goes to landfill is a major battle for most companies, but Ellis explains that one way Walgreen Boots Alliance has tackled this, is to ‘provide information to the people’ and allow them to develop schemes to achieve this objective. In America, staff have come up with ideas ranging from collecting old glasses to one enterprising colleague who has amassed more than 8,000 pairs of shoes for people in Africa simply by asking customers of her store to donate their unwanted footwear.
It may not seem to be of strategic relevance, but Ellis says: ‘Our stores are part of the local communities. Our people have to do things that also matter to them and their communities.’
‘We don’t want to landfill anything,’ he explains. But it is work in progress. There are pilot schemes in America, donating damaged or discontinued products to domestic charities. And at Alliance Healthcare Espana, a ‘zero waste to landfill’ philosophy, which included reducing waste sent to landfill and increasing recycling levels, resulted in a 24 per cent drop in 12 months.
Ellis believes today’s companies need to be open and transparent, that they should welcome scrutiny and answer any queries posed by external stakeholders.
When he arrived at Boots in 2003, the company was being targeted by animal rights activists who wrongly believed it tested products on animals. In fact, Boots conducted its last test on animals in 1964, but, almost 40 years on, it was being attacked because its policy was not widely known.
It was up to Ellis to engage with the activists and demonstrate Boots’ credentials. But he also developed a comprehensive policy regarding animal testing. The company is now not allowed to use any animal testing information that has come into the public domain since 1964 in the development of new products or those created in the intervening period. However, Boots’ scientists are allowed to draw on the new research for products created in-house prior to that date, as they likely were initially tested on animals.
But policies, such as these, are not static. When Alliance Boots acquired a stake in a pharmaceutical chain in China four years ago, its animal testing policy had to be revised. The laws in China did not prohibit such practices, and the government insisted that any imported cosmetic products were tested on animals.
As a result, Boots did not sell any of its own brand products in China. But the company has also worked with the Chinese government to find an acceptable compromise to both sides; it has offered insight into how its chemists test products without recourse to animals, and also moved some manufacturing to the country to bypass any need to test on animals. For example, it is developing and manufacturing John Frieda hair products in China that specifically meet domestic needs. Shampoos that do not have as many bubbles, and so consume less water to rinse off, say.
‘We get about half a dozen letters a week asking us about animal testing,’ says Ellis. ‘It’s the new generation looking for the answers. We have to be able to demonstrate that we are doing the right things. Should we test on animals? No. But that leads into animal welfare. Are all the eggs in our sandwiches produced by cage free hens? It is impossible to say. There may be a threat of avian flu [which would mean the birds need to be temporarily caged]. We have to be able to understand the issues in order to be able to justify our positions.’
Having joined the purely British business Boots, Ellis now works for a global operation with all the problems that poses. For example, the REACH legislation, an EU regulation that addresses the use and production of chemical substances, bans more than 1,000 chemical products. No such legislation exists in the US.
‘The issue for us is how we formulate products that we can sell in the UK and the US?’ he asks. ‘Which products that can be sold in America are banned in the UK?’
Having started to look at the issue of supply chains 15 years ago, Ellis now has a comprehensive directory of where each of Boots’ 30,000 products come from and how it is produced. He can explain how all the world’s Argan oil is produced by female collectives in Morocco, providing them with a fair trade wage and independence, and how the proceeds have funded the first ever education programme for the tribeswomen and also an eco-forestation system to protect the Argan forests.
‘It’s a perfect story for us, we work with six co-operatives.’
Suppliers have to comply with UK law, EU law and Boots’ own exacting standards. They have to fill in copious documents, detailing everything from the shelf life of their products to the cartons they use to transport them. ‘We take a sustainable approach to procurement,’ says Ellis. The company is a member of Sedex, a collaborative platform sharing ethical supply chain data.
‘If people ask questions about our products, we should be able to answer them.’
In 2007, Boots was acquired by Alliance Unichem, a wholesale distributor of pharmaceutical and medical supplies. Ellis undertook an audit of its supply chain. ‘Because of the way we were structured, we were able to embed our practices across the group,’ he explains. Three years ago, the company was bought by America’s Walgreen. Its American owners had previously shied away from sorting out its supply chain, and the work that entailed, but Ellis relishes the challenge.
‘You shouldn’t abrogate responsibility because it is difficult,’ he says.
But he is not just thinking about today’s issues. Ellis has an ability to recognise issues on the distant horizon that could become a problem in the future. Two years ago he recognised that microbeads, tiny particles of plastic added to cosmetic products, could become problematic as environmentalists started to expose their damaging impact on aquatic life. Within a short period, Ellis had introduced a new policy that stated Boots would stop using microbeads in all its products by the end of 2017. By the time, Britain’s media and the UK Government had woken up to the issue, Boots was able to point to its policy – and avoid front page stories.
Indeed, it had pledged to withdraw microbeads before the Government voted to outlaw them. More recently he has been thinking about our bathroom habits. As a member of the Forum for the Future, he is considering bathrooms of the future. What if there was a way of making showers automatically turn off after three minutes, he asks. Or a way to let people know the optimal amount of water for a bath – a virtual Plimsoll Line?
But he is also considering ways to reduce the carbon footprint of washing products. Seven per cent of a shampoo’s carbon footprint, for example, is in its manufacturing and sale. The rest – 93 per cent – is down to the user, from heating the water to the duration of the wash. Ellis is wondering whether the solution is dry shampoo. It’s a product that sells out at Boots’ pop up chemist at Glastonbury and is favoured by explorers trekking the Amazon.
That’s all that Ellis knows for now: he’s just throwing the question out there. Once again.
This article appeared in the first issue of Corporate Reputation. For more information on that publication, please email email@example.com