They’re Greeeaaaatttt!

What can you say about companies that have a good handle on giving back to their communities and other stakeholders besides, “They’re Great!” Most companies include corporate sustainability and corporate social responsibility as critical pillars of their organizations, and rightly so. But beyond environmental concerns, corporate sustainability and social responsibility involve giving back in ways that promote people inside and outside the business. While the general public would view sustainability programs as philanthropic (which may also be intended), sustainability programs and social responsibility can be symbiotic. The company that institutes the programs also benefits from the transaction and involvement as much as the beneficiaries.

Corporate Sustainability VS. Corporate Social Responsibility

Corporate sustainability emphasizes the growth and profitability of a business in three distinct ways in three areas of society. First, there are environmental issues. These tend to get the most press as they include actions that companies can take to reduce their environmental impact and carbon footprint. The social aspect of corporate sustainability looks to gain approval from stakeholders, employees, and the community at large. The economic factor of corporate sustainability involves reaching long-term profitability through the implementation of sustainable business practices.

On the other hand, corporate social responsibility is a broader concept that deals with accountability to the public, stakeholders, and the company itself. For example, Starbucks has developed a college achievement plan designed for its employees that empowers eligible employees to receive 100% tuition coverage through a partnership with Arizona State University online.

There are some similarities between corporate sustainability and corporate social responsibility. For example, both focus on helping companies pursue goals that allow them to be ethically profitable while positively impacting those around them. While the concepts are closely related, they also have their differences. Where social responsibility focuses in retrospect, corporate sustainability is forward-looking. Social responsibility shapes opinion in the media, with politicians, lobbyists, other stakeholders, and advocacy groups. The driving factor behind social responsibility also includes initiatives that promote a company’s reputation; whereas, sustainability deals with developing ideas and opportunities for emerging markets. This last idea is an essential facet of sustainability worth examining, as it exemplifies the symbiosis between organizations and their stakeholders with the focus of driving increased profits. Such is the case with a company known for being “GRRRREEAAAT!”, the Kellogg’s Corporation.

A Symbiotic Case Study

For over a century, Kellogg’s has set a precedent for many in the food industry. Beginning with W.K. Kellog’s process of making toasted corn flakes and then taking the product to market in a brilliant and novel (at that time) “Waxtite” packaging, Kellogg has earned a quality reputation for innovations in the food industry. As with many things, time tests products, technology brings changes to products, and consumer behaviors influence trends towards certain products over others. Over time, one such consumer and scientific trend has centered around improving health and diet. Many companies, like Kellogg, must adapt to these changes. For Kellogg, corporate sustainability has guided the company to be creative, making up for losses through strategic investments in other companies that support their bottom line.

Such is the case with a more recent project, a $100M investment arm for Kellogg, known as Eighteen94 Capital (named for the year of the companies founding). The program was developed to jump-start an initiative to improve exposure to innovations in the food world and advance Kellogg’s own products and ingredients by tapping into new and upcoming talents in the food industry. At the same time, this initiative meets corporate sustainability goals by helping incipient innovators within their industry to refine and improve their product lines and scale up to handle direct business interactions with the food giant.

This initiative has proven fruitful for Kellogg and has delivered some surprising results. According to Kellog executive and managing director of Eighteen94 Capital, Simon Burton,

“We launched Eighteen94 nearly five years ago at a high level looking for two things: strategic benefit and financial return…[at the same time] we partner with the companies in question; part of our model is to help.”

As a result of Kellogg’s engagement with other innovative companies like Siren (plant-based-snack startup), Bright Greens (blenderless superfood smoothies), Taali (maker of “popped” seeds from water lilies), and a whole host of other suppliers, both Kellogg, and the companies they are investing in benefit immensely from working together. The smaller companies contribute to improvements in the quality of Kellogg’s products while gaining invaluable support from the larger company. These partnerships benefit Kellogg by giving the company exposure to new emerging products and providing insights and education to the giant in an ever-evolving consumer environment. According to Burton, Kellogg is not trying to run these partner businesses but will offer assistance and advice to the emerging companies. This symbiosis is a win-win for both partners. The smaller companies enjoy the direction and experience provided by a company that has endured over a century of change while allowing Kellogg to merge new innovations into their ever-expanding product lines.

Being in business as long as Kellogg has been in business says a lot about its strength. Still, Kellogg has not cornered the market on innovation (although their cereal bag is pretty nifty and still used today). Kellogg recognizes that they can learn a thing or two from these startups, which operate with more agility and leanness. Through these relationships, Kellogg can improve exposure to novel ingredients that are trending and product applications that can contribute to Kellogg’s own improvements.

Final Thoughts

By making corporate sustainability a key focus, companies may position themselves so that relationships flourish between their organization and those within their sphere of influence. In instances where global influence is a contributing factor, sustainability implications are far-reaching and even life-changing for those affected by these kinds of partnerships. This kind of involvement also impacts the public perceptions and bolsters a positive response to an organizations’ views on social responsibility.

Leave a Reply