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The boss leaves, CSR stays

The abrupt ousting of Emmanuel Faber, the charismatic boss of Danone, made international headlines in March. The media resonance of this governance matter is commensurate with the Group’s strong reputation in the field of sustainability. Despite the damage caused in terms of governance, Danone's strong ESG commitments must not be called into question.

With his profile as a sustainability missionary and with his orthodox management methods, Emmanuel Faber upset more than a few people, including members of the board of directors. However, it was the weak financial results that brought about its downfall on the 15th of March, as claimed by activist shareholders. The company had a very difficult year in 2020, harder hit by the economic effects of the health crisis than its competitors Nestlé or Unilever. Emmanuel Faber’s departure is another chapter in the long history of the French food giant known for its commitment to the environment and society.

In the 1970s, Antoine Riboud, the legendary and visionary head of Danone, was already stressing the importance of pursuing a dual mission, both economic and social. In 2005, the Group's social mission was officially included in its bylaws. With the French law of 2019 promoting CSR (“Loi Pacte”), Danone became the first listed company with a mission. A committee of experts, chaired by former WTO Director Pascal Lamy, ensures that four major environmental and social objectives are met: a portfolio of healthier and more widely available products; the promotion of regenerative agriculture to protect the planet’s resources; the pursuit of social innovation and greater inclusion for its employees.

Using the United Nations Sustainable Development Goals (SDGs) as a nomenclature, Danone demonstrates to its responsible investors and other stakeholders that the impacts generated (and now measured) are relatively positive and, in any case, less negative than those caused by the rest of the food industry − which is not known for its exemplary record in protecting health and the environment.

By the end of 2020, 50% of its products were notably covered by B Corp certification (a benchmark in the field), with the target set at 100% for 2025. More than 80% of its packaging is reusable, recyclable, or biodegradable (with a target of 100% by 2025). In terms of agriculture, Danone is promoting several practices that aim to respect the earth, plants, animals, and people. On the climate front, the Group’s ambition is to be carbon neutral by 2050, in particular through the use of 100% renewable electricity from 2030.

It must be emphasised that these various commitments are not those of a single man but of the company as a whole, which is now accountable to its shareholders for its ESG performance. The ousting of Emmanuel Faber −albeit abrupt− should therefore not be interpreted as a signal that Danone’s sustainability policy is being challenged. In this case, as in most examples offered by ESG champions, in the long term, profit and sustainability are not incompatible, but work together and reinforce each other.

Our specialist


Simon Perrin

Responsible Investment Specialist