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MIGROS: SUSTAINABLE SUPPLY CHAIN STRATEGY (A): WORKING WITH WWF AND PROFOREST TOWARDS A PALM OIL STANDARD
Reference no. 606-045-1
London Business School (2006)
This is the first of a two-case series (606-045-1 and 606-046-1). In 1999, senior managers of the Swiss retailer Migros, learnt about a very negative but little known impact of the palm oil supply chain and its potential contribution to the deforestation of the rain forest. Quickly, the Swiss media had discovered the theme of pristine rain forest that is cleared for palm oil plantations. As Migros was processing palm oil in many of its products, it wanted to make sure that its reputation was not damaged due to the palm oil issue. The retailer decided to set up a strategic collaboration with the WWF (World Wildlife Fund). Jointly, Migros and the WWF developed a standard for sustainable palm oil supply chains and made it compulsory for each of Migros' private label suppliers. The retailer gained a significant reputation advantage by following this strategy, and it was awarded, the World Business Award at the Johannesburg World Summit by the United Nations Environment Programme (UNEP), and the International Chamber of Commerce (ICC). Migros leveraged that recognition by communicating that strategy in the Swiss media. In order to ensure a sustainable palm oil supply chain on a larger scale and to reduce its purchasing costs, Migros pioneered talks on an international palm oil standard. Today, this standard is supported by an increasing number of multinationals.
2006 - oikos Case Writing Competition - second prize winner