Danone has for years been a beacon for those who believe in holding corporations accountable for their impact on human rights, communities, and our planet. Its evolution into a purpose-driven company (“entreprise à mission” under French law) was an affirmation of its long-standing determination to place its people, the communities it touched, and its impact on our planet within the core of the company’s purpose.
The Danone Chairman and CEO Emmanuel Faber’s departure on March 14 cannot be allowed to encourage activist investors principally interested in short-term financial goals. Nor can it be allowed to mark a significant change of direction for the Company, replacing its economic, social, and environmental objectives with objectives focused primarily on returning value to shareholders at whatever cost.
The Company did more than “talk the talk.” It “walked the walk” in very concrete and practical terms., Danone made a commitment to ensuring its employees have access to the fundamental rights to which many companies pay lip service. That commitment has played out through concrete actions including the signing of nine international agreements with the IUF. These agreements cover issues that are off-limits for workers and their unions in many companies including: ensuring limits on all forms of precarious work; applying international standards to protect employees’ rights in cases of restructuring. In addition to those nine international agreements, a recent, pioneering neutrality and access agreement in the USA guarantees that Danone’s US workers can exercise their human rights to freely join and be represented by a trade union. Danone again acted as a beacon for rights in a country where employers often obstruct and deny those fundamental rights, a point underscored by the Biden administration which has recognized the difficulty US workers face when exercising those rights. President Biden himself has pointed out that denying those rights is a significant contributing factor to the vast inequalities that exist in the world’s richest economy.
Unique among its peer companies, Danone has agreed to an engagement process with its workers across all its international operations far beyond that legally required at the European level. Central to this is an annual meeting which includes union representatives from all parts of its global businesses.
Danone has recognized that its employees are more than just that. The trite statement by so many major corporations that “our most important asset is our people” has been given concrete substance within Danone for many years. The widespread reaction of Danone workers and their unions around the world to the recent antics of activist investors that threaten core Danone values is a testament to that.
Danone has focused with determination on transforming its environmental footprint with significant investments to make good on its environmental commitments in the near term. The company’s actions are far from the “greenwashing” seen on so many corporate websites; Danone has taken risks in the service of this mission, again acting as a pioneer for what so many today believe should be a far more significant role for major corporations.
The activist investor sharks circling Danone, perhaps smelling blood following their successful ousting of Emmanuel Faber, will face opposition to any subsequent efforts to destroy the core values that have been Danone’s for so long. That opposition will emerge from many places. Danone workers themselves will be at the forefront. We also expect resistance from political circles, notably amongst those who see companies’ roles in a broader societal context and have witnessed the inequality and misery that unfettered investor greed has created. A significant part of the investor community increasingly claims to support companies with strong environmental and social goals and, critically, we hope, equally strong practices. We expect those investors to stand up now and show these are not just empty words.
Danone has to perform financially but should not be forced to do so in a way that threatens its pioneering role as a corporation that so many, including increasing numbers of consumers, hope and believe most corporations can emulate.