DANONE By Maitane Sardon and Cristina Roca
Danone SA said Wednesday that it will place greater focus on its ESG goals by adopting the French "Entreprise a Mission" legal framework, and setting up an independent committee to oversee and report on its progress.
The move is part of the company's aim to get B Corp certification by 2025. The certification is issued by nonprofit B Lab to companies that meet certain social and environmental criteria and that make themselves legally accountable to balance the interests of their stakeholders with the interests of their shareholders.
As part of the "Entreprise a Mission" framework, Danone will define a social and environmental purpose beyond profit and bind itself to pursue specific sustainability goals. Danone said it will create a committee independent from the board that will monitor its progress. Danone is the first listed company to adopt the framework, according to the company.
Danone will set out its purpose, that it defines as "bringing health through food to as many people as possible" in its articles of association--a document that specifies the regulations for its operations and defines the company's purpose.
"This move [responds to] a wake-up call from a crisis that we believe is going to be long," Danone Chairman and Chief Executive Emmanuel Faber said in a call with media. "We are designing a set of key performance indicators that will allow us to monitor our progress," he said.
Danone said this step is consistent with its goal to become a Certified B Corporation. To date, 20 of the French dairy company's subsidiaries have become B Corp certified.
"Danone is working to get the certification by having one subsidiary after the next certified but it is not a simple process as it takes a lot of work, specially for large multinationals," says Andrew Kassoy, one of the co-founders of B Lab, the nonprofit behind the certification.
Mr. Kassoy says to become a B Corp, companies have to meet a high set of social and environmental performance standards and change their governing documents so these reflect that the company's fiduciary duty isn't to maximize value for its shareholders but to consider all of its stakeholders including workers and supply chains, the communities where it operates, the environment and its consumers.
Write to Maitane Sardon at maitane.sardon@wsj.com and Cristina Roca at cristina.roca@wsj.com
