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Social, societal and environmental responsibility
5.2 Information concerning Danone's social, societal and environmental performance in compliance with the Grenelle II law
DANONE
REGISTRATION DOCUMENT 2015
192
Initiatives with schools
In addition to its participation in various school forums, in 2008
Danone supported the creation of the Social Business/Enterprise and
Poverty chair at HEC Paris. The chair's mission is to help to develop
a more inclusive economy that creates economic and societal value.
It is co-chaired by Professor Muhammad YUNUS, Bangladeshi econ-
omist, entrepreneur and Nobel Peace Prize winner, and Mr. Martin
HIRSCH, Chairman of the Agence du Service Civique and member
of the Danone Ecosystem Fund Steering Committee.
Danone's partnerships and initiatives on behalf of educational in-
stitutions are also implemented at local level and supported by the
subsidiaries themselves. For example, the “Danone Young Social
Entrepreneur” (DYSE) program in Indonesia was developed by the
local Human Resources teams to attract young talented individuals.
Subcontracting and suppliers
Recognition of suppliers' and subcontractors'
social and environmental responsibility
Given that Danone works with thousands of suppliers around the
world, these companies account for a significant portion of its
environmental and social impact. In line with the “dual economic
and social project”, the RESPECT initiative launched in 2005 and
implemented via the Danone Way initiative (see section 5.1
Danone
social, societal and environmental approach
) entails extending this
vision to Danone's entire supply chain, excluding milk producers
(see section
Relations with milk producers
hereafter), based on
several processes:
•
contractualizing suppliers' Corporate Social Responsibility (CSR)
performance through the signing of Sustainable Development
Principles (including social, environmental and ethical compo-
nents) and their integration into the general terms of purchase;
•
information-sharing based on self-disclosures by suppliers
regarding their CSR performance using the Sedex platform
(cross-company evaluation platform for the consumer goods
industry, see section 5.1
Danone social, societal and environmental
approach
);
•
external CSR audits of suppliers considered as at-risk follow-
ing this information exchange with a view to implementing an
appropriate corrective action plan: in 2015, 60 audits SMETA
(
Sedex Members Ethical Trade Audit
) were conducted among the
suppliers identified. Danone also have access to over 800 supplier
audits on the Sedex platform and over 16,000 audits thanks to
the principles of mutual recognition through the AIM Progress
consortium for responsible sourcing.
The suppliers involved cover all of Danone's purchasing categories
except raw milk (see section
Relations with milk producers
hereaf-
ter), including raw materials (fruit preparations, powdered milk),
packaging (plastic and cardboard), productionmachinery, transport
and other services (promotional products, industrial services, etc.).
Subcontractors, i.e. suppliers that manufacture finished products
on behalf of Danone, take part in the above-mentioned RESPECT
initiative, although Danone uses very little subcontracting since the
vast majority of its finished products are produced in its own plants.
The areas covered by this process include respect for Human Rights,
compliance related to health and safety, compensation and work
hours, respect for the environment and ethical principles, partic-
ularly with regard to the application of the International Labour
Organization's fundamental conventions.
By taking these actions to ensure its suppliers' corporate social
responsibility, Danone also secures the future of its partners and of
its own development. RESPECT also contributes to the changing the
nature of the commercial relationships, in terms of completeness
and transparency of the information to be formalized and shared.
Relations with milk producers
Milk collection organization
Danone procures milk from over 140,000 milk producers in some
50 countries around the world. More than 80% of these producers
are small producers located mainly in emerging countries of Africa,
Asia and Latin America that own fewer than 10 cows. In this case, milk
is collected from collection centers to which these small producers
deliver their production daily. Inmany other regions such as Europe,
Russia and South Africa, milk is produced by family farms that have
anywhere from a few dozen to hundreds of cows. These producers
represent 15% to 20% of Danone's milk suppliers but the bulk of the
volume. Danone usually collects milk directly, and has often done
so for several generations. In some regions where milk production
does not have the same historical tradition, including some parts
of the Middle East and North America, supply security, in terms of
both quantity and quality, is ensured by much larger farms, which
can have thousands of cows. Danone's milk collection therefore
reflects the broad diversity of the world's production systems.
Contractual relations and improvement process
Danone's partnershipswith itsmilk producers cover technical aspects,
such as milk quality and the farm's economic performance, as well
as environmental and societal impacts. Specific Danone tools such
as the FaRMs tool – short for Farmers Relationship Management –
allow Danone's technicians to conduct regular reviews with each
milk producer of all the criteria and best practices in these areas
and to develop improvement plans along with the producer.
From an economic standpoint, in recent years Danone has de-
veloped innovative contracts with producers in the United States
and Europe to reduce milk price volatility, thereby offering better
visibility and financial stability. These contracts, called CPM for
Cost-Performance Model, define the price of milk taking produc-
tion costs into account and are developed in partnership with milk
producers or their organizations.