Sustainability Project

Sustainability Project Abbreviated Recommendations Strategic Corporate Social Responsibility Class May 2, 2007 Student Consultants: Sarah Anderson and Daniel Mandel Primary Liaison at Del Monte: Bonnie McFarland Slide 1

Table of Contents Project Background Project Scope Resources Used Deliverables and Recommendations

Project Background Wal-Mart is Del Monte’s largest customer and has come in with its new expectations for its suppliers, including very stringent requirements. Del Monte does not have a sustainability policy. It engages in some sustainability efforts, but has not collected information or set goals. When the project started, the company was at the beginning stages of a sustainability initiative. We were contracted to deliver the following… Slide 3

Project Scope Sustainability vision and policy Internal strategy to manage sustainability efforts Process for communicating sustainability efforts Slide 4

Resources • External • Company Benchmarking • In-Class Resources and Slides • CSR Readings • Internet Research Slide 5 Internal • Team Meetings and Individual Interviews • Matt Materazo – Sales Strategy • Bonnie McFarland – Graphic Design & Packaging • Scott Butler – Operations and Services • Steve Balling – Agricultural Services • Jarod Cook – Environmental Services • Jeff Ratcliff – Business Development (Wal-Mart Relationship) • Internal Survey – 32 Senior Level Managers

Project Overview Benchmarking Companies

Project Overview Benchmarking Outline • Overall CSR Vision • Sustainability Policy/Vision • Business Case • Current Practices • Examples of Programs Sustainability Communications • Organization • Resources • External Validation • Partners • Standards • Certifications • KPI’s • Suppliers Internal Strategy • Stakeholders • CSR Report • Web • Internal Communications

Deliverables and Recommendations • Business Case • Sustainability Vision and Policy • Sustainability Management and Communications Strategy • Implementation Action Plan

Business Case • WAL – MART • Not adopting a sustainable strategy can be viewed as not supporting its initiatives • Companies that do not follow its initiatives are the ones that do not receive long-term support • CUSTOMERS REQUIREMENTS / REGULATIONS • Ability to address the requirements of most customers in the future • Stay ahead of changing environmental requirements (both business and regulatory driven) • EMPLOYEES • Increase employee satisfaction and motivation leading to higher retention and lower costs • Attract strong employees as many graduates are evaluating companies on sustainability • OPERATIONS • Direct cost savings: Less and more efficient use of resources (e.g. energy, water, packaging) • Over the long term, secure sustainable supplies of fish, fruit, vegetables and water • BRAND • Strengthen relationship with consumers and retailers and protect against potential deterioration • Remain competitive – many competitors are ahead of Del Monte already

Sustainability Vision and Policy General Recommendations: Communications Very high level vision to show commitment to sustainability Deeper policy to be used as a guide for planning and setting main initiatives Communicate strategically to most relevant stakeholders Constant Evaluation The policy should always be directly linked to business principles and strategy The policy should be adapted to changing environments and priorities Future Actions Use vision and policy as the basis for your sustainability reporting Link vision and policy to an overall CSR vision and leverage in all areas of the business Think of the sustainability policy as Del Monte’s formal signal, both internally and externally, that the company is serious about sustainability

Sustainability Vision At Del Monte, our corporate vision is to nourish families and enrich lives. Our vision touches all aspects of our operations, and in pursuing it, we strive to provide high quality and healthy products while preserving the earth’s limited resources for current and future generations. We are committed to our consumers, employees, shareholders and the communities in which we operate. We recognize we are part of a larger community and we strive to protect the environment and the natural resources on which we all rely, and are dedicated to the environment and to exploring ways to be more efficient and innovative in the use of resources and in our operations.

Sustainability Policy Components Overall Policy Goals and Objectives Main Initiatives

Policy - Overall Policy Del Monte’s policy has always been to comply with all applicable laws and regulations of the United States of America and of all other countries where we do business. We have a dedicated team of experienced professionals responsible for guaranteeing that our business activities comply with the law, and we continuously seek innovative ways to reduce environmental impacts and resource intensity of our operations, while supporting our ongoing business objectives and generating new business opportunities. We view environmental protection not only as our obligation, but also as an area of opportunity. As a result of this belief, we have begun a substantial effort to go beyond compliance in a number of key environmental areas. As a primary processor of agricultural and fisheries products we are intimately connected to and constrained by the ongoing health of the environment. From our suppliers to our plants to our final products, we are passionate about doing the right thing to meet the needs and improve the quality of life of the present generation while protecting Earth’s resources for future generations. Del Monte will work and share information with employees, suppliers, business partners and other stakeholders to understand better our environmental impact. We will encourage all of our partners to share our vision.

Policy – Goals and Objectives We will seek to accomplish these objectives without compromising product quality and while maintaining safety operations and cost reduction as our priorities: AGRICULTURE Our goal is to produce the highest quality and most efficient crops possible while following responsible agriculture practices. We are consistently seeking new ways to protect the soil, use water efficiently, conserve and enhance biological diversity and minimize our use of fertilizers and pesticides. We will also strive to work with our current family farms and support their sustainability efforts • FISHERIES Our goals are to protect marine life (dolphins, whales, and other marine life) and not lead to over-fishing or depletion of the exploited populations We will not purchase any tuna caught in association with dolphins and refuse to purchase tuna caught with gill or drift net. We condemn the use of these indiscriminate fishing methods to trap dolphins, whales, and other marine life along with the intended catch of fish. We require certification that all tuna we purchase is dolphin-safe. PACKAGING Our goal is to use environmentally friendly packaging solutions We will enhance recycled content, recycle-ability and reusability, reduce chemical inputs, remove and reduce packaging and use more effective materials.

Policy – Goals and Objectives (cont) • MANUFACTURING Our goal is to find sustainable, environmentally friendly, and economically feasible ways to improve production methods. We are constantly seeking ways to reduce and manage waste, reduce greenhouse gas emission and reduce water and energy consumption. TRANSPORTATION Our goal is to find sustainable, environmentally friendly, and economically feasible ways to improve transportation methods. We are constantly seeking ways to reduce emissions, reduce freight distance, and increase payload per truck. SUPPLIERS Our goal is to align ourselves with suppliers that also strive to protect the environment. We have similar expectations for our suppliers as we have for ourselves. We expect them to comply with all the regulations and laws as well as pursue sustainable alternatives. BUILDINGS AND OFFICE SPACE Our goal is to operate efficiently using the necessary resources in a responsible way We will strive to implement recycling practices in all of our locations, be less dependent on and use less paper, use more recycled content products, be more energy efficient, use more “green” office supplies, and implement LEED standards when possible.

Completing the Policy – Main Initiatives • First, pick the initiatives to include: • Use decision matrix (next slide) to help selecting initiatives • Start by using the current cost reduction initiatives related to sustainability (e.g. packaging reduction) • Then, talk about those initiatives: • Explain why you have chosen these initiatives • Describe main programs and plans associated with each initiative • Describe how the initiative is contributing to impact reduction • Measure, monitor and report progress to relevant stakeholders

Main Initiatives: Evaluation Matrix Business Case 60 90 40 Slide 17

Deliverables and Recommendations • Business Case • Sustainability Vision and Policy • Sustainability Management and Communications Strategy • Implementation Action Plan

Structure Recommendation Regardless of whether you have a highly integrated and centralized department with primary sustainability responsibilities or a more decentralized structure, it is essential that there be accountability throughout the organization as well as cross-functional interaction and staff support BOARD OF DIRECTORS No board changes are suggested at this time EXECUTIVE LEVEL Assign task members of executive committee to have sustainability overview SUSTAINABILITY LEADER Implement Hybrid Approach: Senior leader (hire / internal promotion) responsible for strategy and coordination with individual department leaders responsible for implementation efforts. MANAGEMENT AND SPECIALIZED STAFF With oversight of sustainability leader, manage efforts within business units CROSS-FUNTIONAL INTERACTION Sustainability team comprised of senior staff with sustainability responsibilities Sustainability charter added to existing cross-functional committee Team formed to focus on specific topic or task Adapted from Designing a CSR Structure - Business for Social Responsibility

Sustainability Team Responsibilities Identify Issues Define Programs Evaluate Progress Document and Report Engage Internally Engage Externally The environment should become part of Del Monte’s regular decision-making process

Del Monte Action Plan

Del Monte Action Plan (cont)

Q & A

Sustainability Project