Importance of Social and Environmental Standards in UK Dairy Industry

The UK dairy industry is growing, but its operations are having adverse impacts on the environment. To mitigate these challenges, the industry must incorporate and utilize different industry standards. This report evaluates the available literature on environmental and social standards and their adoption within the food and agri-business entities within the UK.

The importance of the Social and
Environmental Standards in delivering
Sustainable Business Practices within
the UK dairy industry

Executive Summary
The diary industry in UK is generating steady growth but their business operations are having
adverse impacts on the environment. The dairy industry is mainly focusing on the aspect of
production and profit making and this is giving rise to certain environmental and social
challenges which the dairy industry need to acknowledge and accept as soon as possible. In
order to tackle and mitigate these environmental and social challenges the diary industry must
incorporate and utilise all the different industry standards that are followed across different
industry sectors in UK.
Contents
Executive Summary...................................................................................................................2
1.0 TOR......................................................................................................................................3
1.1 Supply chain management in dairy industries.....................................................................3
2.0 Environmental and Social Challenges facing the Dairy sector in UK.................................4
2.1 The supply chain and types of business...........................................................................4
2.2 Environmental and social challenges associated with supply chain management...............5
3.0 Critical Discussion...............................................................................................................5
References................................................................................................................................10

1.0 TOR
The review of the environmental and social standards has been undertaken by evaluating the
available literature on the environmental and social standards and their adoption within the
food and agri-business entities within the UK. The main purpose of their report is to provide
the strategic guidance to the managers and owners of small business establishments that
would eventually enable them to create and utilise a sustainable business framework within
their chosen industry sector.
1.1 Supply chain management in dairy industries
Figure 1: Dairy supply chain

Figure 2: Dairy distribution channels
First phase of dairy supply chain includes raw milk production starts from cold chain. Milk is
collected from source and kept in storage tank in the organization. In order to secure milk in
better manner, milk is kept in the cooling storage devices. Transport department collects milk
from cooling tank with tankers trucks and transports the milk to organization dairy processor.
In dairy processor stage, quality of milk is checked by the testing department to ensure higher
quality of milk. After successfully tests, milk is transferred by the department to the final
production line. It may be pasteurised, homogenized to produce consumer’s milks or even
used to produce cream, cheese etc.
2.0 Environmental and Social Challenges facing the Dairy sector in UK
2.1 The supply chain and types of business
The diary production output in UK follows the 80-20 rule. As far as milk sourcing is
concerned, the top 2% of the UK dairy processors bought almost 70% of the country’s total
milk production. The main milk buyers in UK are Arla Food, Dairy Crest, Meadow Food,
Müller Wiseman Dairies, Caledonian Cheese, First Milk and Glanbia Cheese. These top dairy

processors maintain regular and direct contact with almost 70 percent of their milk suppliers
and this essentially enables them to guarantee the milk’s hygiene and sustainability standards.
2.2 Environmental and social challenges associated with supply chain
management
3.0 Critical Discussion
The environmental and social standards are playing a vital role in preventing unfair business
practices within the dairy industry and this is playing a vital role in helping to ensure that the
dairy industry is operating their business is a ethical and responsible manner which would be
sustainable in the long haul. There are various environmental and social accountability
standards which must be strictly followed and implemented by the different business
establishments operating in the UK dairy industry (Henson & Humphrey, 2010). These
include the generic environmental standards such as ISO 14001 and BS 8555, the social
accountability standards such as SA 8000 and the Ethical Trade Initiative Framework.
Additionally, there are supply chain specific standards which are applicable within the dairy
industry in UK and these include the Red Tractor or GlobalGAP (which applies in case of
farms) and IFS, BRC and ISO 22000 (which are applicable in case of food companies).
EnvironmentalissuesEmission,wastegreaterexploitationofthenaturalresourcesOzonedepletion,OzonedepletionClimatechangesLongtermdamagetoecosystemHazardousairemission,Greenhousegasemission

ISO 14001
The ISO 14001 is the international standard that deals with the organisational requirement for
maintaining an effective environmental management system. The ISO 14000 family of
standards provides the practical tools to the modern day organisations to manage and comply
with their environmental obligations. The ISO 14001:2015 and ISO 14006:2011 are focusing
on the existing organisational environmental systems to accomplish this objective. The other
standards in the ISO 14000 family are specifically focusing on the diverse approaches such as
environmental auditing, communications and life cycle analysis to tackle the modern day
environmental challenges such as climate change (Marimon et al., 2011). By implementing
the ISO 14001 standards within their business, the dairy industry would be able to reduce the
adverse impacts of their business operations on the environment. They would be able to
operate in an environmentally responsible manner and contribute towards global
environmental conservation efforts.
BS 8555
The BS 8555 standard deals with the implementation of the environmental management
systems within organisations. The modern day consumers are extremely conscious and aware
of the adverse impacts of the business operations of the global corporations on the
environment and as a result they are increasingly demanding environmentally responsible
products and services from the business establishments. The BS 8555 Certification acts as a
strong proof of the organisational commitment towards eco-ethics. The BS 8555 provides an
effective way for both small and big business enterprises to spread the costs of implementing
a generic environmental management system which eventually helps business establishments
to conduct their business operations in a socially responsible and ethical manner (Barwise &
Battersby, 2016). By implementing the BS 8555 standards, the dairy industry would be able
to satisfactorily fulfil their duties and obligations towards the environmental and this would
help them to ensure the future growth and sustainability of their business.
SA 8000
This is another important standard which are applicable to the modern day business
establishments. The SA 8000 is the leading social certification standard for factories and
organisations all over the world. This standard was incorporated by Social Accountability
International in 1997 and over the years this standard has become the main framework which

helps the modern business establishments to demonstrate their level of commitment and
devotion towards the fair treatment of workers across diverse industry segments (Hiscox et
al., 2008). The SA 8000 standard considers eight areas of social accountability in the modern
day workplace which is well supported by the corporate governance system imposed by the
management which is continuously striving to drive improvement in all areas of the standard.
The SA 8000 standard is widely popular among the global business establishments and is
held in high esteem by business leaders as it helps them to ensure the highest levels of social
compliance within their supply chains without compromising on their business interests
(Hiscox et al., 2008). The SA 8000 standard has been formulated keeping in mind the labour
provisions that are contained within the Universal Declaration of Human Rights and
International Labour Organization (ILO) conventions. By respecting, supporting and
complimenting the national labour laws in UK, the SA 8000 is playing a vital role in ensuring
ethical working conditions for the working class population in UK.
Ethical Trade Initiative Framework:
The Ethical Trade Initiative (ETI) Framework has been developed by the UK government
and it acts as a guide for companies while helping them to prevent labour rights issues by
managing and addressing all the risks that could arise from labour rights violations. Business
establishments implement the Ethical Trade Initiative Framework through proper negotiation,
engagement and collaborations between all their organisational staffs. The guiding principles
of the (ETI) Framework include the following:
1) Employment is freely chosen and the concept of bonded or forced employment should not
exist.
2) Workers have the freedom of association and the right to collective bargaining and the
organisations must respect this right of their staffs.
3) The working conditions provided to the staffs must be safe and hygienic which should not
pose a threat towards their health and safety. It is the responsibility of the employers to
ensure the safety of the employees at the workplace (Van Bommel, 2011).
4) Child labour is strictly prohibited and organisations should never utilise any form of child
labour within their business.
5) Workers should not be subjected to excessive working hours.

6) Employers should never discriminate among their employees and they should promote
greater equality at the workplace.
7) Employees should be paid fair and standardised wages which would at least meet the
minimum legal and industry benchmark standards.
8) Regular employment should be provided to the employees so that the employees are able
to obtain a sense of job security at the workplace.
The ETI framework plays a vital role in ensuring the safety and well being of the thousands
of people who are heavily dependent on the dairy industry for their livelihood and this helps
in providing them with a sense of job security by eliminating the process of discrimination
and unfair dismissals from the workplace (Van Bommel, 2011).
Red Tractor:
The Red Tractor standards are playing a vital role in maintaining the supply chain of the
farming and dairy industry in UK. The Red Tractor logo has been widely recognised by the
consumers in UK and over the years it has developed as a symbol of trust which guarantees
that the food that the consumers are buying is safe and could be traced back to the original
source. This Red Tractor standard is playing a vital role in ensuring ethical and sustainable
business practices among the diverse supply chains that are closely associated with the dairy
and farm industry in UK. The Red Tractor standards recognise the aspect of bio-security and
provide it with the highest levels of importance and this helps in strengthening the already
existing guidelines and protocols regarding the livestock farms (Henson & Humphrey, 2010).
The Red Tractor standards are reviewed in a periodic manner (every three years) by the
Technical Advisory Committees (TACs) which includes farmers, vets, trade associates and
retailers and this helps to ensure that all links within the farming and dairy supply chain are
adequately represented while reviewing and amending the existing Red Tractor standards.
By implementing the Red Tractor standard, the Diary industry in UK would be able to
conduct their business operations in a socially responsible and ethical manner. It would help
the dairy industry in UK to tackle and address the various environmental and social
challenges that they are facing within their business.
Recommendations for CEOs:

CEOs of both large and small dairy establishments must strictly obey and comply with all the
standards that have been discussed above in order to ensure the future growth and
sustainability of their business.

References
Marimon, F., Llach, J., & Bernardo, M. (2011). Comparative analysis of diffusion of the ISO
14001 standard by sector of activity. Journal of Cleaner Production, 19(15), 1734-1744.
Griffith, A. (2011). Fulfilling contractors’ corporate social responsibilities using standards-
based management systems. International Journal of Construction Management, 11(2), 37-
47.
Barwise, J., & Battersby, S. (2016). Environmental management systems. Clay's Handbook
of Environmental Health, 281, 298.
Henson, S., & Humphrey, J. (2010). Understanding the complexities of private standards in
global agri-food chains as they impact developing countries. The journal of development
studies, 46(9), 1628-1646.
Hiscox, M. J., Schwartz, C., & Toffel, M. W. (2008). Evaluating the impact of SA 8000
certification.
Van Bommel, H. W. (2011). A conceptual framework for analyzing sustainability strategies
in industrial supply networks from an innovation perspective. Journal of Cleaner
Production, 19(8), 895-904.