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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

CASE STUDY 1
Kingfisher

Kingfisher is Europe's largest home improvement retailer, with 1,300 stores and
9,000 employees in 16 countries. Its operating companies include BCC (The
Netherlands), Promarkt (Germany), Vanden Borre (Belgium), Darty (France),
Comet (UK), B&Q (UK), Kotas (Turkey) and Rno-Dpt (Canada).

In 2001, the group achieved a turnover of 12.1 billion ($17.5 billion) and a pre-
tax profit of 606 million ($878 million).

At the end of 2001, Kingfisher unveiled a group-wide initiative to monitor, improve

and report on corporate social responsibility issues at the level of individual
companies.

The group has identified six ways in which it believes CSR can help its business:

1. Being ready for the future: identifying and managing issues which have
the potential to affect the bottom line, either positively or negatively;
2. Respect for people: making Kingfisher companies attractive places to
work, and thereby retaining skilled staff;
3. Stores that communities welcome: maximizing customer loyalty and
improving morale among the workforce;
4. Product innovation: identifying 'green' products that consumers will want
to buy;
5. Saving costs: recognizing that many CSR initiatives are largely good
housekeeping, such as reducing waste and retaining staff more
effectively;
6. Brand: using innovation and excellence within individual operating
companies to enhance the reputation of the group as a whole.

Kingfisher has devised a 'ladder' model to simplify the assessment of CSR within
operating companies. The ladder has four rungs. The bottom rung is 'Managing
the risk', and the next rung up is 'Managing the issues', followed by 'Creating an
opportunity' and finally 'Leadership' at the top. Company managers will have to
decide where their businesses currently stand on each of 12 separate 'ladders',
each representing a key issue such as waste, climate change or community
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

relations (see below). They are also asked to identify where they would like
eventually to be on the ladder, and to propose a realistic timescale.

These action plans are due for completion by the end of April 2002, and a group-
wide CSR report will be published in the spring of 2003.

The CSR initiative will be coordinated by a nine-person 'social responsibility

committee', which now includes include six members of the main board of
directors as well as Kingfisher's head of social responsibility, Dr Alan Knight. A'
social responsibility team', working closely with the committee, will provide
coaching and advice to managers within individual operating companies, and will
also be responsible for reporting progress both internally and to the outside
world.

One of the challenges for Kingfisher is to develop a strategy that is flexible

enough to accommodate the differences between individual businesses yet
strong enough to reflect a common vision.

Kingfisher's definition of social responsibility entails 'making sure that in helping

our customers improve their quality of life we do not destroy someone else's'. It
adds: 'That might mean improving the working conditions in the factories that
make the products we sell, using renewable energy sources, or making sure our
equal opportunities policies are robust.'

Group chief executive Sir Geoff Mulcahy says several of Kingfisher's subsidiaries
have been active in CSR for some years already, particularly in terms of
environmental stewardship. 'We believe it is now time to co-ordinate these
activities more rigorously, at group level.'

The 12 key issues identified by Kingfisher

The way we treat all our people is becoming more important than ever
Every product will soon be telling a story - and they will all need to be
good
Communities will reject businesses who are not good neighbors
Our suppliers need to be cleaner and greener too
We are selling more wood, but it is becoming harder to find
Chemicals are causing increasing concern and controversy
We need to plan what happens when our customers want to dispose of
the products they bought from us
Packaging waste will become a bigger financial waste
We will be judged by the way the people who make our products are
treated
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Moving more stock is good - more traffic congestion is bad

Climate change equals changes to homes - appliances will change too
When we throw rubbish away it takes our profits with it
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

CASE STUDY 2

Growing Prospects

Winnipeg's first hydroponic urban greenhouse is nestled, oddly enough, in a

place where the sun does not shine. A visit to Growing Prospects Inc. involves
wandering beneath the Canadian National Railway main line near the historic
Forks Market and the CN Railway Station. Behind the orange door are the offic-
es, classroom and growing area of this innovative and unique operation.

Established in 1998, Growing Prospects is a non-profit corporation that has set

out to provide individuals on income assistance with the skills they need to find
full-time employment in the horticulture and greenhouse industries.

As the business grows and becomes self-sustaining, the profits will be redirected
to support inner-city crime prevention projects and to encourage youth employ-
ment. Growing Prospects is also becoming a reliable, year-round supplier of cut
herbs to restaurants, caterers, and food brokers, eliminating much of the reliance
on imported herbs from California and other areas.

Much of the hydroponics equipment used in their operation has been donated to
Growing Prospects by the Winnipeg police. It is equipment seized in drug raids
that would otherwise have been destroyed.

Growing Prospects can trace its roots back to a classroom vegetable garden at
Dufferin elementary school where Dave Taylor, president of the Growing Pro-
spects board, teaches. Looking for a way to ensure that the students had a year-
round supply of fresh produce to supplement their diets, he was able to obtain
hydroponics equipment from the Winnipeg police and start a small hydroponics
operation at the school.

A gang-related shooting involving a student at the school spurred efforts to de-

velop a larger programme that would provide young people with employment and
job training. All the proceeds from Growing Prospects would go to support two
programs aimed at keeping young people out of gangs and creating employment
opportunities.
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Each year, the programme offers 20 people the opportunity to gain essential life
and job skills. Participants receive instruction in English, business math, life
skills, personal development, elementary plant sciences, and workplace skills. As
well, there is a work-experience component and market-driven training.

Growing Prospects is on its way to meeting its goals, but could not have done it
without the support of several other organizations. A feasibility study for the pro-
ject was funded by Human Resources Development Canada, and concluded that
Growing Prospects could, in three years, become self-sustaining based on a 420
square metre facility. Currently, growing space occupies 280 sq m, and there is
room for expansion.

'We are right on target as far as our business plan goes,' says Taylor.

The Winnipeg Development Agreement (WDA), through its Human Resources

Training Component, has been very supportive of the programme. Its funding
commitment covers the majority of operating costs and overheads.

Taylor has high praise for the WDA. 'I like to acknowledge the support of the
WDA whenever possible,' he says. 'They have been tremendous in helping to
make this a reality.'

Growing Prospects has also received funding from the Sustainable Development
Co-ordination Unit and CentrePlan. Taylor believes the support of these organi-
zations reflects a view that this is a sustainable business which benefits the
whole community.

Hydroponics is a relatively new form of horticulture, and its connection with the
illegal cultivation of cannabis gives it something of a stigma. Indeed, Growing
Prospects encountered this bias initially when presenting the concept to potential
project partners.

'We needed to demonstrate to the police that we were not training the students
just in hydroponics, but in a whole range of horticultural skills,' says Taylor.

Designing the growing space presented challenges as well. The Growing Pro-
spects location was formerly an exercise facility for Canadian National railway
employees. It is hard to imagine how this space, with its low ceiling that rumbles
loudly with each passing train, would be conducive to good health. However, as a
location for a hydroponics operation it is quite adequate.

Another challenge has been achieving greater efficiency in the growing opera-
tion. For example, the site uses some of the latest technology to conserve energy
and recirculate ambient moisture in the air. Cool air is brought in over the grow-
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

ing lights, increasing the air temperature by up to 20C before it enters the fur-
nace. Afterwards, condensate is collected from the air as it cools, and is used to
water the plants.

Maximizing space means maximizing profitability. Taylor and the programme par-
ticipants are working hard at developing the full potential of the site. Crops must
be very profitable per square foot to offset the expense of lighting and heating
systems.

At the same time, they are seeking funding for a 'fertigation' system. This com-
puter system controls distribution of the nutrients to the plants and maximizes
their growth potential. At a cost of around $30,000 it is a system that would allow
Growing Prospects to provide consulting services to other greenhouse and hy-
droponics operations.

The outlook for Growing Prospects is good. Plans are in place to expand the
growing operation into space that is currently used for underground parking.
Customer demand for the fresh basil continues to increase, and other herbs and
edible flowers are now being grown to determine their commercial viability.
Growing Prospect hopes eventually to be producing five tons of basil a year.
Meanwhile more hydroponics equipment is becoming available as court cases
are completed.