“Ferrero has always had corporate
social responsibility at the core of its activities, even when the concept of
CSR had yet to be invented,” explained Giovanni Ferrero, CEO of the Ferrero Group,
the world's third largest confectionery company.
In an in-depth interview with
Ferrero, we discussed the origins and evolution of the company, all in the
context of how and why they have integrated business objectives with employee
wellbeing, social responsibility and corporate citizenship.
As readers will learn, Ferrero stands at the tip of the
spear in terms of their pioneering commitment from the very beginning to fusing
principles of business and society together into one harmonious strategy.
Tell me a little bit about the values, ethos and mission
of the Ferrero company when it was founded nearly 70 years ago.
We often say that Ferrero has had corporate social
responsibility in its DNA because it started to develop an ethical approach to
business from the very beginning. A clear example of this approach was the way
in which, after WW2, my dad and my grandfather handled the relationship with
the farmers in the countryside, who inevitably became the company’s main
workforce.
Almost everywhere in Italy, farmers were forced to leave
their fields to go to work in the factories of the big cities. This fact
created a dramatic fracture between cities and countryside, with the latter
often ending up abandoned and impoverished. In the “Langhe”, in Piedmont, this
did not happen. Fully aware of such risk, Ferrero organized a minibus service
that would pick up the farmers from their homes to drive them to the factory in
Alba and take them back home at the end of the work shift. This way, the
farmers managed to develop their small plots of land, which gradually became
more and more prosperous, thanks to the new financial resources earned in the
factory.
In the early ‘50s, the Langhe were regarded as a
“depressed area”. Now they are one the most thriving areas in Italy, which was
recently named aUNESCO World Heritage Site.
Our philosophy has always been based on mutual
satisfaction between company leaders and workers. If a workman has a
sustainable life and earns enough to feed his family without running the risk
of being fired at the first crisis, he will do the utmost to ensure the success
of the company. It is worth reminding readers what my dad wrote to the
personnel when he inherited the company from his father, Pietro Ferrero, in
1952: “I will have fulfilled my mission only when I will have managed, with
tangible solid facts, to guarantee to you and your children a safe and serene
future”. A promise fully kept. In seventy years, in the Alba plant, nobody has
ever been fired for overstaffing or redundancy and there has never been a
single hour of strike against the company.
Over the years, how has Ferrero committed itself to
principles of community, being a responsible corporate citizen, and
philanthropy?
As I said earlier, Ferrero has always had corporate social
responsibility at the core of its activities, even when the concept of CSR had
yet to be invented. For instance, way back in 1961, Ferrero organized a
conference on social matters entitled “The adaptation of man to work and
industry” in order to acknowledge the problems of the workers in the factory
and find the best solutions. In 1983, we created the Ferrero Foundation of Alba, an architectural complex
dedicated to 3,300 retired employees and to their families. This complex meets
the needs of the retired workers with entertainment venues, workshops, a
library, a multipurpose auditorium, gyms to keep fit, exhibition halls,
facilitiesfor medical clinics and a modern nursery. Under the motto “Work,
create, donate”, the Foundation carries out social and cultural activities
available for all former Ferrero workers under the careful and passionate
supervision of my mother, Maria Franca Ferrero.
Another crucial pillar of our social responsibility was
the creation of our social enterprises in poor areas of India, Cameroon and
South Africa, which have two main objectives: the creation of new jobs and the
implementation of projects and initiatives of a social and humanitarian nature
dedicated to safeguarding the health, education and social development of
children and teenagers.
Finally, I am very proud of our Kinder + Sport program,
aimed at fighting childhood obesity. In the last few years, there is a growing
and unjustified media campaign against sugar, which a few questionable scientists
regard as the main cause of the obesity “epidemic”. Any honest and rigorous
nutritionist, however, agrees that obesity is mainly caused by overeating and
physical inactivity. So, we have decided to encourage children and teenagers to
practice sports, in a serious educational program that promotes active
lifestyles. This program involves 27 countries and nearly four million
children.
What would you say are some of the biggest challenges to
sourcing raw materials sustainably?
The selection of raw materials by Ferrero is regulated by two main
principles: excellence in quality and full respect for human rights and
sustainability. We have established an ambitious set of goals in order to have
all of our ingredients from sustainable sources by 2020, without any
compromise. Quite a few of them have already been achieved, such as for coffee,
milk and palm oil.
Even organizations such as Greenpeace say that Ferrero is
“a model” in terms of respect of nature and defines our company as “transparent
and responsible” for having been one of the first to decide to use only palm
oil that does not contribute to deforestation.
At the same time, what would you point to as your most
important milestone of success to date?
The most important aspect of Ferrero’s evolution through
the years is that our revenue has grown steadily, and this was true even during
the financial crisis that wiped out many other companies. Most recently, we
have become the third leading Group in the world in the field of confectionery.
I believe that the main reason for this success is that we never bite off more
than we can chew. We do not believe that entering the stock market would suit
our business. If you have stakeholders whose main interest is to achieve quick
profits, it is difficult to implement long term plans or to test a product
properly.
As more and more corporations are integrating principles
of responsibility and sustainability directly into their core
operations--rather than pursuing an individual corporate philanthropy arm or
"CSR" unit--Ferrero seems to have had this critical integration from
the beginning. What are some of the leadership lessons you've learned in terms
of why this integration has been so successful?
The main lesson is that the factory must be at the service
of men and women, and not vice versa. This great attention to the employees’
needs, to their families, to their life even when they stop working, cements an
extraordinary social cohesion that helps both sides.
I will never forget the way our workers reacted in 1994,
when the river Tanaro flooded the factory in Alba with mud and debris, putting
at risk the machinery and all the Christmas production. Hundreds of employees
spontaneously reached the plant with brooms or any other tool they could find
to shovel it all away. Some of them had even their own home flooded but first
decided to save their workplace! I strongly believe that if we had not created
such a strong relationship with our employees, that little miracle would not
have been possible.
-Thomas Reuters Foundation
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