Advocates often assert that the embrace of sustainability helps lower rather than add costs. At Grupo Bimbo S.A.B. de C.V., it was an urgent need to cut costs that led to the discovery that sustainability done properly makes significant contributions to a company’s bottom line.
Daniel Servitje, the chief executive officer at Grupo Bimbo, in an interview with Milling & Baking News, re-viewed the evolution of sustainability at the world’s largest wholesale baking company. He said Bimbo is regularly recognized as a sustainability leader in the Mexican business community. Late in 2011, the Bolsa Mexicana de Valores (the Mexican Stock Exchange) chose Bimbo for inclusion in a new Sustainability Index, which helps investors identify companies that stand out on the basis of their environmental stewardship, social responsibility and corporate governance.
Mr. Servitje said his own background and interest in the subject first readied the company to support the issue.
“My first entrepreneurial initiative was a solar energy company when I was 18,” he said. “It floundered, but I had a real interest in renewable energy and energy conservation that I have never lost. I also enjoy the forests and hiking and as a company we’ve worked on a reforestation initiative in Mexico.”
The chance to turn this interest into action for Grupo Bimbo occurred at a time 10 years ago when the company was struggling financially.
“We had an economic crisis in the country and needed to reduce our engineering staffing or move many of them to new areas,” he said. “We asked some engineers to try to find some energy savings, which they did. Their discovery quickly proved profitable and showed high payback ratios.
“Since then, we’ve had a small team of engineers developing and testing ways for us to be more efficient in our energy gas and electricity usage, and to improve efficiency in our distribution routes. It has been a very profitable initiative and we are expanding globally with different divisions in various stages of the process.”
Mr. Servitje said U.S. sustainability efforts may be different from those being pursued in Mexico, as an example.
“We are happy with the process in the United States,” Mr. Servitje said. “For example, they have installed efficient lighting, significantly reduced landfill waste and decreased electricity by increasing energy efficient equipment in some plants. These actions make sense from an economic standpoint, and we believe we have a role as manufacturers and distributors to reduce our environmental footprint.”
Grupo Bimbo sustainability progress is carefully measured around three principal areas: carbon footprint, water footprint and waste management. Longtime Grupo Bimbo executive Rosalio Rodriguez has overall oversight.
Some examples of the results in these areas over the last three years include decreasing carbon dioxide generation from the company’s plants and vehicles 6.2% and reducing the company’s water use by 3.9%. Additionally, in Mexico and Central America Grupo Bimbo was able to recycle 71% of its total waste (hazardous and non-hazardous).
Making sure progress toward sustainability is real and continues is crucial, Mr. Rodriguez said.
“We are working on the entire value chain, and we are going to be audited,” he said. “Our suppliers will too.”
Perhaps the most visible move by Grupo Bimbo on the sustainability front is an initiative announced in December 2010. The company is partnering in the construction of a wind farm in Union Hidalgo, in the southern coastal region state of Oaxaca, not far from Mexico’s border with Guatemala.
Called “Piedra Larga,” the wind farm is expected to be the global food industry’s largest, generating nearly 100% of the electrical power used by Grupo Bimbo in Mexico. The installed power of the plant will be 90 megawatts, derived from 45 turbines of 2 megawatts each.
The initiative will allow the company to diminish gas emissions, equating to 17 million gallons of diesel and 180,000 tonnes of carbon dioxide (roughly 15% of current emissions excluding the Sara Lee acquisition).
While firmly committed to the initiative, Mr. Servitje was careful to point out Grupo Bimbo is not entering into the wind energy business.
“It will be a profitable commitment, but we are not investing,” he explained. “We are committing to buy the wind energy at least 18 and up to 28 years. This should have a financial benefit while producing clean energy in all our plants in Mexico. It will be the largest conversion of non-renewable to renewables in the world in the food industry, as far as we know. There is some associated risk — if electric costs decline significantly, we may pay more than market prices — but we are optimistic about the results. It has been eight years from conception to realization. We’re almost there.” (The farm is expected to go on line in the final months of 2012.)
The embrace of sustainability at Grupo Bimbo also may be seen as consistent with broader values embraced by the company, Mr. Servitje said. It underscores that to whatever degree Bimbo has cut costs through sustainability, other motivations are at play, several of which date back decades.
“We also believed in our social responsibility many years before it became mainstream,” he said. “It’s nothing I invented. It’s part of the DNA of our company. Our leaders and founders always believed business could make society better.”
In fact, today, the company’s vision looking to the year 2015 calls for Bimbo to be “a model to be followed with worldwide recognition in terms of sustainability.” The vision continues, “We bring together our economic and social goals with awareness and commitment to reduce our environmental foot-print.”
“We’ve focused on playing our part on many fronts, not just environmental, but also on developing better citizens for our countries,” Mr. Servitje said. “The image of the company I think is a positive one. If we make mistakes, we need to correct them. We don’t only want to grow but also to make society a little better. It’s in our blood. Ultimately, we do it not to make money, but because it’s our role in business.”