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Weekly Short
18 March, 2021
Danone has made waves in the sustainability arena in recent years.
Back in 2015, Danone CEO Emmanuel Faber announced that company subsidiaries were all working towards B-Corp certification (by no means a simple process – particularly for a multinational organisation) and, last year, Danone changed its legal statutes to become an ‘entreprise à mission’ to reflect its raison d’être of ‘health through food’. This change meant the company no longer legally existed just to generate profit for its shareholders, but also to benefit customers’ health and the planet.
However, not everyone is happy with Danone. This week, UK and US shareholders successfully voted out the CEO in a move that has bouleversé Faber’s French supporters, arguing the CEO did not strike the right balance between shareholder and stakeholder interests. This comes after Danone reported an 11% rise in profits versus Nestle’s 43% rise since 2014. Faber’s supporters responded by calling out his critics’ obsession with profits and failing to see the long-term value of responsible capitalism.
The jury is still out as to whether Faber was a good CEO or not. He certainly has been bold with his commitments to sustainability and stakeholder centricity, but this shouldn’t mean shareholders have to sacrifice on profitable returns. Perhaps, if he was truly delivering a profitable and responsible business – surely the definition of sustainable – we wouldn’t be having this conversation at all… Quel dommage.
By Jennie Mitchell