How Iceland Foods strikes a balance between purpose and profit

Jane Dessar: Why did you write The Green Grocer? And what is its most important message?

Richard Walker: I wanted to share my own insights from my varied and diverse career: working for myself in property and in retail for my family business, Iceland; leading and advising a number of charities; and, at Iceland, taking a global lead in spearheading a number of important sustainability initiatives.

My key objective was to lay out a manifesto for the changes that need to happen across the public and private sectors, and in businesses of all sizes, if humanity is to meet the huge challenge of climate change.

As I show in the book, achieving those changes requires constant hard choices, compromises and trade-offs. Sometimes the apparently perfect solution simply isn’t achievable – but the most important thing is for all businesses to recognise their need to try.

JD: You talk about democratising environmentalism – that it shouldn’t just be something for the middle classes. How can retailers make this work in practice? Won’t there always be a compromise between cost and greenness?

RW: Yes, there will always have to be compromises and trade-offs, that’s what I wanted to lift the lid off in my book. But it’s important for every business, large or small – from kitchen table start-ups to multinationals – to start taking action and do something, rather than wait on others.

Ultimately, I do think that purpose and profit can co-exist, and the book seeks to explain how. The key difference in The Green Grocer is that it is not a theory book, written by an academic or a commentator; it offers practical lessons straight from the shop floor.

JD: Iceland was the first food retailer in the world to sign the Climate Pledge. What are the actual implications of this? How will the business need to adapt to hit net zero carbon emissions by 2040?

RW: It’s absolutely vital that we decarbonise food because agriculture, food production and food waste together account for around a quarter of all global greenhouse gas emissions.

Achieving net zero by 2040 is going to require complete, systemic change. We have made excellent progress to date, reducing our own operational carbon footprint by 74% since 2011, but that simply represented the low hanging fruit of cost savings. The great bulk of our emissions actually fall within Scope 3, far up our supply chain, and tackling these requires detailed, rigorous mapping and analysis of our emissions which we will be undertaking with the Carbon Trust. I don’t underestimate the scale of the challenge but net zero is something we are determined to achieve by changes ranging from the introduction of more sustainable forms of packaging to the identification of more sustainable feedstocks for our meat – and ultimately, where we find we simply can’t eliminate emissions, offsetting.

JD: What is the greatest challenge in business leaders being both ‘activists and capitalists’?

RW: Everyone says that they value sustainability and are willing to pay more for ethical products. But experience unfortunately shows that in practice most customers will simply opt for cheaper alternatives from a competitor.

Businesses have to ensure that their ethical initiatives always remain relevant and relatable to real people, like Iceland’s customers.

The solutions we adopt in the pursuit of sustainability need to be cost-neutral and no less convenient and available than the products we previously offered. We must also strive to ensure that solving one problem does not create another one – to take an obvious example, removing plastic packaging that results in an increase in food waste.

JD: What do Iceland employees feel about the Doing it Right commitment?

RW: Doing It Right is a source of great pride among our 30,000 colleagues: they are the ones who have driven it and we certainly could not have done it without them. I know very well from the emails I receive directly and from the comments I see on social media that our colleagues are very proud to be leading the charge on sustainability.

JD: You have spoken of the dangers of short-termism. Can you elaborate?

RW: Companies that are beholden to short-term capital providers – notably publicly listed companies that are under enormous pressure to deliver ever-increasing quarterly profits for their City investors – can become dangerously fixated on short term performance and lose sight of the long term viability of their business.

With the average length of time a quoted share is held standing at 22 seconds, it is clear that stock trading is in the hands of people – or, more likely computers – that have little concern for corporate social responsibility. That said, there are signs of positive change with the massive weight of ESG-conscious money now starting to drive investment decisions, as we saw recently in the boycott of the Deliveroo float.

JD: Do business leaders need to treat their organisations more like communities? Why and how?

RW: Yes.

Empathetic leadership is going to be key to business success in the 21st century.

It is all about listening to people, taking the trouble to ask them for their views and understanding the needs of all the communities that your business serves, not just shareholders. I note in the book that many of the most positive initiatives we took to help our customers during the COVID-19 crisis were ideas submitted by our store colleagues rather than dreamt up in head office.

JD: What impact has the COVID pandemic had on how you run the business, both in terms of dealing with customers and employees. Has it made it harder to be green?

RW: We have had to pivot our entire business model to meet the switch in demand from high street stores to online home deliveries, increasing our online capacity tenfold to a million slots per week and creating more than 5,000 new jobs, chiefly for online pickers and home delivery drivers.

There have been some short-term setbacks, for example in our plastic packaging replacement programme, and I am actually rather less optimistic about this now than when I wrote the book, as I think that the COVID-driven switch to buying more pre-packaged products may prove more enduring than I had hoped.

In the long run, though, I am optimistic that the pandemic will prove a systemic opportunity to join the dots between human health, environmental health and the climate, given that COVID came about because of humanity’s ever-increasing encroachment upon nature.

It has been great to see so many companies, big and small, continuing to take positive actions on sustainability throughout the pandemic, and it is vital that we ignore the siren voices of Big Plastic and others arguing that this is not the time for radical change.

JD: What qualities do you prize in managers? Are you increasingly looking for talent that has a good grasp of environmental and sustainability issues, even in roles where this is not ostensibly core?

RW: A lot of people are surprised to discover that we don’t actually have a CSR department at Iceland. I say that we have 30,000 CSR professionals and the more we can embed the commitment at every level across the company, the better. Ultimately this will surely prove more effective than vesting responsibility in a siloed department that 99 per cent of the workforce feel they don’t have to worry about. We are certainly getting a lot more high quality job applications from people who have been attracted to working at Iceland by our sustainability initiatives.

JD: What lessons can other companies learn from the way Iceland approaches green issues?

RW: We are by no means a sustainable business; we are just trying to understand our impacts, seeking to minimise them, and advocating and spreading the word to encourage others to do the same. If you read the book it may also help you avoid some of the mistakes we have made along the way. The Green Grocer is obtainable at all good bookshops and online. If you buy it from Amazon, please leave a review!

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