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Journal of Business Research 65 (2012) 1800–1810
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Journal of Business Research
Case study on Dole's carbon-neutral fruits ☆
Bernard Kilian a,⁎, Jelle Hettinga a, Gustavo André Jiménez b, 1, Santiago Molina a, Adam White a
a
b
INCAE Business School, P.O. Box 960-4050, Alajuela, Costa Rica
Latin American Center for Competitiveness, Sustainable Development (CLACDS), Costa Rica
a r t i c l e
i n f o
Article history:
Received 1 September 2010
Received in revised form 1 April 2011
Accepted 1 August 2011
Available online 26 November 2011
Keywords:
Carbon neutral
Tropical fruits
Agri-food supply chains
International trade
a b s t r a c t
This case study analyzes Dole Costa Rica's situation in 2008 when the company began evaluating the possibility of going carbon neutral. The Costa Rican Government's announcement that the entire country should
be carbon neutral by 2021 (Costa Rica Carbon Neutral Strategy 2021) has inspired the company to consider
carbon neutrality. Taking the first step, however, has plenty of implications that stakeholders need to analyze
carefully before making any decisions, including impacts on company strategy, market share and finances. In
addition, the company has to decide on which offsetting method it would use.
© 2011 Elsevier Inc. All rights reserved.
1. Introduction
One beautiful, sunny day in San Jose, Costa Rica, Rudy Amador reflects on the past week. Although an earthquake had recently rattled
Dole's office building, Mr. Amador felt more concern about Dole's climate change initiative based in Costa Rica. As head of Environmental
Affairs for Latin America, Mr. Amador has plans to develop an effective strategy to achieve carbon neutrality, but needs to have a solution that would be appealing both to Dole Costa Rica, as well as
Dole's global management.
In 2007 Dole Costa Rica announces the company's goal to go carbon neutral. This goal relates to Costa Rica's country-wide plan to
achieve carbon neutrality by 2021. As of 2008, Dole has successfully
offset emissions related to Costa Rican transportation and plans to
evaluate the status of emissions related to domestic production.
Dole's managers consider the possibility of making its Costa Rica–
US banana value chain carbon neutral. Such an achievement would
make Dole a leader in mitigating climate change and further differentiate the company from competitors. Some Dole employees argue that
☆ The authors thank Connie Jones Gonzalez and JBR reviewers for reading and comments of an early version of this case.
⁎ Corresponding author at: INCAE, P.O. Box 960-4050, Alajuela, Costa Rica.
E-mail addresses: [email protected] (B. Kilian),
[email protected] (J. Hettinga), [email protected]
(G.A. Jiménez), [email protected] (S. Molina),
[email protected] (A. White).
1
Centro Latino Americano para la Competitividad y el Desarrollo Sostenible
(CLACDS), INCAE, P.O. Box 960-4050, Alajuela, Costa Rica.
0148-2963/$ – see front matter © 2011 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2011.10.040
carbon-neutral products may even receive price premiums in certain
markets.
Dole executives consider different approaches in order to bring
the idea of carbon neutrality to the market. On the one hand, Mr.
Amador could recommend a full-scale initiative to offset all valuechain emissions related to bananas and pineapples exported from
Costa Rica; or, Mr. Amador could recommend a pilot project in
which only fruit from a limited number of farms would qualify as carbon neutral. Mr. Amador could also cancel the project entirely.
2. Dole Food Company
James Dole founded the company in Hawaii in 1851. For more
than a century, until 1985, the company primarily produced and distributed commodities because Dole's products lacked valued added.
Since then, however, the company has made many changes. Today,
Dole has a trusted brand name and globally-recognized products.
Dole is the world's largest producer of fresh fruit, fresh vegetables
and fresh-cut flowers, sharing the market with Chiquita, Del Monte,
and Bonita (see Appendix 1). The company ranks as one of the
world's largest producers of bananas and pineapples. Dole also leads
the packaged fruit product, ready-to-eat salads and vegetable markets. Dole has approximately 80,000 employees and operates in
more than 90 countries around the world (Yahoo Finance, 2009).
Dole promotes its international brand directly to consumers. Promotional efforts for bananas and pineapples focus on customers,
such as supermarkets, wholesalers, and distributors. For the company's principal products, Dole maintains multiple supply regions and
farms to ensure consistent supply and quality. Dole invests heavily
B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
in research and development, which yields proprietary varieties and
growing practices, enhancing quality. The company also fosters a culture of innovation in products and programs, like the use of corrugated cardboard boxes in packaging.
Dole actively promotes several areas of Corporate Social Responsibility (CSR) (see Appendix 2). As part of the CSR program, Dole
provides homes for many of its workers, supports schools in communities and implements various environmental programs within operations and in surrounding communities. In 1998 Dole's banana
operations in Costa Rica became the first banana exporter and agricultural producer in the world to receive ISO 14001 certification for
the company's environmental management system (Dole, 2009).
3. Dole Fresh Fruit International LLC in Costa Rica
3.1. Value chain
Dole's operations in Costa Rica center on banana and pineapple
production and sourcing. Banana production closely mirrors pineapple processing. However, a few, specific activities differ in pineapple
production, including: cold storage facilities required to handle ripe
fruit; intensive machinery use (tractors and boom sprayers) for land
preparation and fertilizer application; tillage frequency (every two
years for pineapples); and larger and more industrial packing facilities (Dole, 2008).
Banana shipments occur in two different ways. Dole has its own
farms where the company packages fruit, and the company has
signed contracts with external producers who are in charge of providing high-quality bananas. Third-party producers contribute about 50%
of the company's fruit production. Dole provides technical assistance
to a diversified portfolio of producers in order to maintain steady volumes and quality.
Banana and pineapple field production shares similar characteristics. Pineapples take 18 months to grow before harvest, while bananas need around nine months. Both crops receive fertilizers and other
plant protection chemicals. For pineapples, the company applies all
fertilizers and pesticides to the plants' leaves. In the case of bananas,
Dole applies fertilizer to the soil. The company applies fungicides by
plane, used to control Sigatoka Negra, approximately once per week.
Physiologically, the company can harvest bananas year-after-year,
since they are a perennial crop; Dole has to replace pineapple plants
almost annually.
After harvesting, producers package all products at the farms. The
total weight of a box of bananas differs from the weight of pineapples.
A banana box for export to Europe weighs 18.14 kg. Pineapple boxes
average 12 kg in weight; a pineapple box for export to Japan will
weigh 10 kg. Worldwide, Dole sells more than 25 million boxes of
pineapples and 165 million boxes of bananas a year (Yahoo Finance,
2009).
Once producers have packaged the products, outsourced and independent distribution companies provide terrestrial transportation.
They load their trucks (refrigerated containers) with packed fruit for
transportation from farms to ports. Operations at the ports basically
move the products from the truck to vessel storerooms; companies
outsource most of this work. The terminal yard provides storage in refrigerated containers for fruit awaiting the next vessel call.
Vessels stay at port no more than two days due to the high costs of
keeping them there. Each vessel transports fruits from Costa Rica to
Rotterdam, Holland, Europe's main port. Trucks take products off of
the vessels and transport them to wholesalers or specific retailers.
Dole assures quality control by inspecting fruits at port.
3.2. Volume and price (economies of banana and pineapple production)
Because bananas and pineapples act as market commodities, global markets establish prices and leave little room for differentiation.
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The company trades fruit using CIF and FOB prices, depending on
where Dole's responsibility ends.
Price drives negotiations with buyers. Usually, Dole bases company relationships on multi-year contracts. Like for other commodities,
prices for bananas and pineapples have increased in recent years.
From August to November 2008 banana prices oscillated between
$730 and $800 per ton (Index mundi, 2009). Since sales volumes depend on changes in climate and growing conditions, prices tend to
show volatility (Appendix 3).
Most bananas come from tropical countries. Ecuador exports the
most bananas, with more than 4, 900,000 tons exported in 2006
according to FAO statistics. Costa Rica exports the second largest
amount, with 2,200,000 tons in 2006. Costa Rica, Ivory Coast and
the Philippines export the most pineapples worldwide, with
1,194,179 tons; 115,604 tons; and 231,882 tons, respectively
(FAOstat, 2009) (Appendices 4.1 and 4.2).
Both products require intensive labor; however, they differ in
terms of total planted hectares, soil quality and agricultural techniques. Costa Rica has few unions; those unions that do exist do not
have much strength. Producers more often form part of solidarity associations, consisting of employer and employee representatives who
meet to work together.
The European Union (EU) has importing constraints on bananas
coming from Latin America because the EU gives preferential treatment to ACP countries (African, Caribbean and Pacific Group of
States). The constraints consist of a quota per country and a tax on
any extra imported amount. After the Doha Round failed in 2008, banana importers and country producers agreed to reduce tax percentages for banana imports (Barkham, 1999).
4. Dole carbon-neutral initiative
As a continuation of Dole's strategies for differentiation and CSR,
the company has announced an intention to go carbon neutral in
Costa Rica in the next ten years. The firm cites three main motivations
for the initiative: first, a natural extension of its environmental programs; second, customer inquiries about the company's carbon
footprint and plans; and third, the Costa Rican Government's commitment to carbon neutrality by 2021 (Soto, 2009).
Dole intends to act as a market leader by offering the first carbonneutral bananas and pineapples in the industry. Dole recently
signed a contract with FONAFIFO, a Costa Rican Government forestry
agency, to offset its carbon emissions from terrestrial transportation
(6000 tons of CO2 per year) for the 2008–2012 period using FONAFIFO's forestry offset program. Dole plans to research how much of the
company's own forestry projects help reduce CO2 emissions before
signing any further contracts. A multi-department team based in
Costa Rica has been created in order to lead and manage the initiative
(FONAFIFO, 2009).
Appendices 5 (CO2 emissions), 6 and 7 (carbon footprints for bananas and pineapples) show Dole's CO2 emissions from production,
maritime transportation and distribution in destination countries. Bananas require ripening, which means that distribution causes more
emissions.
Carbon neutrality relates closely to climate change. This relationship will generate significant changes in carbon-free trade during
the next few years. Some people consider carbon-free trade as revolutionary as power steam during the Industrial Revolution.
4.1. Climate change
With the beginning of the Industrial Revolution, concentrations of
CO2 in the atmosphere began to increase, mainly due to the incineration of fossil fuels. Increased population and economic development
have caused global CO2 emissions to rise accordingly. Rising levels
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B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
of atmospheric greenhouse gasses (GHG) have resulted in increased
global temperatures, commonly referred to as global warming.
In the 1980s environmentalists took notice and began pushing for
actions to reduce emissions, leading to the creation of the United Nations Framework Convention on Climate Change (UNFCCC), an international treaty signed by nearly all countries in 1992 to stabilize
greenhouse gas concentrations in the atmosphere. The Kyoto Protocol, signed in 1997 by most major countries in the world, set specific
targets for all developed and former Soviet countries for the
2008–2012 period. By 2008, all signatories, except for the United
States and Kazakhstan, had ratified the protocol (Brohé, Eyre, &
Howarth, 2009).
Under the Kyoto Protocol, countries determine how to reach their
targets, by reducing domestic GHG emissions, purchasing rights from
companies that have exceeded their reduction requirements or
implementing GHG-reducing projects in other countries. The protocol
created the “Joint Implementation” (JI) mechanism for projects in industrialized and former Soviet countries and the “Clean Development
Mechanism” (CDM) for projects in other Kyoto signatory countries. In
2005 the European Union introduced its own cap-and-trade system
that mandates several industrial sectors (e.g. power production,
chemical, refineries, paper) to reduce emissions or buy CO2 credits
on the market (Hashmi, 2008).
4.2. Corporate emission reductions
While governments set mandatory reduction targets, companies
and individuals have started taking voluntary action, as well, usually
in anticipation of future legal requirements or as part of broader corporate objectives. Under the umbrella of CSR, many companies have
initiated projects to reduce their carbon emissions. Others identify
marketing opportunities or face pressure by non-governmental organizations (NGOs) to take action. Carbon emissions reduction
initiatives have created a voluntary market for carbon credits, parallel to the regulated US (compliance) market. In the voluntary market companies or individuals voluntarily choose to offset their
GHG emissions by buying credits from companies that have reduced
their own emissions. Appendix 8 shows rapid growth in the voluntary market.
Individuals and organizations trade credits called VERs: “Voluntary Emission Reductions” or “Verified Emission Reductions.” VERs
come from different types of projects in many countries, creating difficulties in comparing or assessing the quality of emissions reductions. Over time, several standards have emerged; Appendix 9 lists
some of the most important standards. Standards include: Voluntary
Carbon Standards (VCS), Climate Community & Biodiversity Standards (CCB) and Gold Standards (CCBA, 2008 and Voluntary Carbon,
2009).
With growing concern for the environment and climate change,
companies increasingly want to reduce their GHG emissions profiles.
Some companies have even pursued the idea of going “carbon neutral” — generally defined as ensuring that an organization's products
and processes have no net negative impact on the climate. A company can go carbon neutral by first preventing GHG emissions and then
reducing or offsetting any remaining emissions (usually through
process or fuel changes). The company may offset emissions by buying carbon offset credits (usually VERs) generated by projects that
reduce global carbon emissions. For example, a windmill project developer in Honduras can sell carbon credits on the international
market.
If Honduras does not have the windmills, then the country's
electricity grid relies primarily on petroleum-generated electricity,
releasing GHG. Cleaner energy production provides the basis
for carbon credits. The difference between the baselines of
GHG emissions (how much GHG would have been emitted by
the petroleum-based source) versus windmill GHG emissions
(how much GHG is actually produced) provides the quantity
of VERs eligible for sale. Some of the main drivers behind carbon
offset purchases include anticipation of future obligations, corporate responsibility and public relations/branding efforts (UNDP,
2009).
Leading multinational companies, such as HSBC, Dell, Google
and PepsiCo, have announced dates by which they will qualify as
carbon neutral. Investors increasingly try to identify which firms
develop a competitive advantage by implementing systems that address climate risks, before they become a legal responsibility
(Cogan, Good, Kantor, & McAteer, 2008). Regardless of national legislation, a growing demand for improved corporate performance on
climate change has prompted companies to integrate climate
change into their board and executive structures in innovative
ways. Nike, for example, established a Corporate Responsibility
Committee in 2001 to review the company's environmental strategies. As a result, the board of directors has approved new GHG
emissions reduction goals of 20% for C02 gases during the
2007–2021 period.
4.3. Carbon neutrality in the food value chain
Since agriculture accounts for about 14% of global GHG emissions
(Appendix 10 shows GHG emissions by sector; IPCC, 2007), Dole
has an important role in mitigating climate change. International
maritime shipping also accounts for a large amount of emissions.
Exporting and importing companies do not voluntarily assume responsibility for shipping emissions, and shipping lines themselves
have not yet determined their role. Dole faces a complex challenge
to consider agricultural, processing and transportation emissions in
the company's approach to achieving a carbon-neutral international
supply chain.
4.4. Producers
Other companies have explored carbon neutrality. A small, but
increasing, range of products on the market sells as carbonneutral, including water (Mount Warning Spring Water), coffee
(Salt Spring Coffee) and wine (New Zealand Wine Company). Even
Unilever, the world's second largest consumer goods company, has
noticed this market trend. Unilever began performing life-cycle analyses for all of the company's products and uses a greenhouse gas
index internally for decision-making. The company applies the
index to reduce emissions and increase awareness among employees. However, out of the company's 400 brands, only the Ben
& Jerry's ice cream sold in Europe has qualified as a completely
carbon-neutral product. As recently as December 2008, Unilever indicated that the company has no plans to market other carbonneutral products (Unilever, 2009).
In the European fruit industry, two Dutch companies have taken
the lead in carbon-neutral production: Eosta and AgroFair. Eosta, an
organic fruit distributor, has sold and promoted carbon-neutral
fruits for a year. Products include apples and pears from Argentina,
citrus from Egypt, kiwis from New Zealand and tomatoes from the
Netherlands (Eosta & First to offer TÜV Nord certified Climate
Neutral Products, 2009). These products have a label with a climate
neutral product sticker. AgroFair, the first company in the world to
introduce fair trade bananas and pineapples, has researched the
possibility of making all products carbon neutral. The company considers carbon neutrality as an extension of the fair trade concept. Together with LEI, a Research Institute at Wageningen University,
AgroFair has looked at the carbon footprint of the company's products and expected to start the first pilot project at the end of 2009
(LEI, 2009).
B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
4.5. Retailers
The opinions and actions of retailers vary widely, mainly as a result of geographical differences. In the United States consumers do
not consider the climate impact of products as a marketable attribute.
US-based companies most often focus on reducing their carbon footprint operationally, and as a result, achieve financial efficiency. In Europe many retailers see carbon neutrality as a marketable feature. In
November 2008, for example, the German retailer Tengelmann
opened a supermarket that had zero carbon emissions: a Klimamarkt
(climate market) (Tengelmann, 2009).
Companies have also labeled their carbon footprint proactively as
a way to provide consumers with useful information to help them reduce the climate impact of their consumption behaviors. Carbonlabeling initiatives take different forms, and include quantitative
measures (grams of CO2), relative measures (i.e. high, medium, or
low) and information on transportation (i.e. sea or land). With this
approach, companies run the risk of confusing supermarket customers since labels have not been standardized. In 2008, Tesco (UK)
started carbon-labeling some of the company's products in cooperation with the Carbon Trust, a British government-funded company
(Guardian, 2008). The label displays a footprint logo and the amount
of CO2 emitted in grams.
French supermarket chain Casino introduced a label with the climate change impact of the company's products in 2006. The company
planned to scale this project up to 3000 products by the end of 2008.
Most retailers have shown more reluctance to get involved in this
issue. The credit crisis, which many experts expected to last until at
least 2010, has caused concern for companies. The crisis has limited
possibilities for supermarkets to charge premiums for products.
Some companies also prefer to focus on the entire sustainable footprint of a product, not only on the issue of carbon emissions.
4.6. Consumers
In his role as Environmental Director, Mr. Amador has seen many
studies related to consumer knowledge and preferences regarding
the environment. Consumers increasingly show concern about climate change. Studies indicate a majority of consumers agree that
each person should take responsibility for his or her personal contribution to global warming and that companies should provide more
product-based information at the point of sale. Consumers demonstrate increasing willingness to reduce their own climate impact
and take environmental friendliness into account when making purchasing decisions (2sustain, 2008).
Some customers prefer carbon labeling, especially in the United
Kingdom. Most British consumers say they prefer to buy a product
with a label indicating the supplier's efforts to reduce carbon and
would like the label to show the actual number of grams of carbon reduced. Even in developing countries and the United States, about half
of consumers claim that they prefer to pay more for environmentallyfriendly products, though climate change, per se, has not been thoroughly tested as an environmental concept among consumers in
those countries.
When discussing this issue with large supermarket chains,
Mr. Amador had heard a different opinion. Supermarket executives
argue that without intensive marketing, consumers would experience
confusion and would not pay a premium for a carbon-neutral
product.
Mr. Amador has also seen studies doubting the reliability of surveys. While most consumers say that they have concern for global
poverty and know about fair trade brands, purchasing decisions remain inconsistent. A difference exists between fair trade and environmental conservation. Some studies try to relate the two, but in reality,
fair trade does not mean environmental conservation. Mr. Amador
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prefers to focus on the important relationship between carbon neutrality and the value chain.
4.7. Important considerations in climate change strategy
In addition to recent market trends in carbon neutrality, Mr. Amador
has identified additional issues that the company needs to address in
any initiative to provide carbon-neutral products to end consumers.
First, specific people across the value chain would need to be held
responsible for particular GHG emissions. Second, Dole's overall climate change strategy would need to meet certain standards to
achieve credibility and avoid accusations of greenwashing. Finally,
Mr. Amador would need to decide on the specific emissions compensation methodology used.
4.8. Responsibility for compensation
Offsetting all value-chain emissions for bananas and pineapples
would involve multiple groups of people. While Dole's operations include production and maritime shipping, other companies control the
rest of the value chain. Therefore, all players would have to allocate
the cost of emissions compensation in such a way that each found
the arrangement acceptable. The value chain participants could simply assign responsibility based on individual activities.
However, the value chain participants do not agree on the responsibility of emissions resulting from international shipping. Regardless of what entity owns the means of transportation, some
industry actors argue that responsibility belongs to either the importer or the exporter (IPCC, 2007). Others state that the importer
and exporter should split responsibility for maritime transport emissions equally. This very issue has surfaced as one of the most problematic in Kyoto Protocol negotiations, particularly between the US
and China.
4.9. Climate change credibility
While selling carbon-neutral fruit would certainly boost Dole's
image in combating climate change, Mr. Amador knows he would
take further action to ensure the credibility of the company's environmental campaigns. Environmentalists have targeted the company in
the past, and Mr. Amador wants to avoid this controversy in the future. Dole could strengthen the integrity of the company's climate
change strategy by continuing internal emissions reductions, performing regular emissions accounting and compensation verification
procedures, aligning itself with reputable organizations (such as
NGOs and academic institutions) and adhering to strict offsetting
standards for VERs.
4.10. Compensation methodology
Dole has many options to compensate for emissions along the
value chain. First, Mr. Amador has a choice among various carbon
credit standards. Some standards have more restrictions so they qualify as more environmentally sound, yet more expensive; other standards cost less, but have fewer limitations. Dole must also answer
the question of where the company should buy credits. Projects to
cut emissions exist around the world.
With accounted emissions amounts, Dole may choose from two
types of carbon credits within the voluntary market: Gold Standards
and VCS credits. The difference lies in the credits' credibility, which
Dole can determine by the credit's price. Table 1, based on Appendix 6,
shows offsetting costs for different standards according to the amount
of carbon emissions along the supply chain.
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B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
already implement sustainable practices. Analysis here should consider the possibility of including an organic pineapple farm, since production styles differ greatly. After verification and offsetting
emissions, Dole could label exported boxes so that clients and consumers know about the new carbon-neutrality feature. This
new label could help Dole assess real impact on stakeholders, like clients, final consumers and outsourced maritime transportation
companies.
Table 1
Offsetting cost in $USD per box of bananas and pineapple.
Source: By MCP(2009) analysis. Based on Hamilton et al. (2007) and Point Carbon
(2008).
Production
Shipping
Distribution
Total
0.04
0.01
0.02
0.03
0.43
0.15
0.19
0.34
Per box of banana
CER
VCS
Pre-registered CDM/JI VERs
Gold Standard
0.06
0.02
0.03
0.05
0.33
0.12
0.14
0.26
4.14. Going forward
Per box of pineapple
CER
VCS
Pre-registered CDM/JI VERs
Gold Standard
0.04
0.01
0.02
0.03
0.20
0.07
0.09
0.16
0.02
0.01
0.01
0.02
0.26
0.09
0.12
0.21
The week has passed, and Mr. Amador needs to make a decision
about what strategy to pursue. While weighing the advantages and
disadvantages of each carbon-neutral option, Mr. Amador begins to
question Dole's fundamental approach to climate change. While the
initial idea to go carbon neutral has been developed and promoted
by Dole Costa Rica, no definitive global strategy from Dole Food Company Inc.'s top management exists to support the carbon-neutral
plan. The limited time dedicated by the marketing operations on improving customer awareness and asking for opinions on acceptance of
carbon-neutral products demonstrates the company's lack of a top–
down mandate.
Without organizational alignment on a climate change strategy,
Dole's carbon-neutral initiative cannot expand beyond Costa Rica.
Outsiders would hardly consider such a limited carbon-neutral
program a legitimate effort by Dole to counter global warming.
Rather than creating a mechanism to compensate for only some
of the company's supply chain emissions, Dole could strengthen
the company's image by going entirely carbon neutral. Although
complete carbon neutrality would present a higher cost and be
more difficult to achieve through client involvement, such an initiative would reduce potential confusion regarding how the company produces a limited amount of carbon-neutral products when
all operations lack complete carbon neutrality (Dole Interview,
2008).
Mr. Amador must also deal with the financial side of things.
Would Dole be able to charge premium prices for carbon-neutral
products? And if so, would the company still be seen as actively
protecting the environment? Instead of considering carbon
neutrality as a stand-alone feature for product differentiation, Dole
could develop and promote this initiative as part of a broader sustainability initiative, including environmental and social issues
other than climate change. This type of action would resist criticism
and present challenges for competitors interested in copying the
effort.
Aside from developing Dole's carbon-neutral strategy, Mr.
Amador wonders where CSR fits in to Dole's broader corporate
strategy and whether or not Dole's management considers CSR a
true priority.
4.11. Strategic options
Mr. Amador has two options regarding the continuation/implementation of the company's carbon-neutral project. He wants to make the
right decision, but he has financial pressures, since the company's financial results in recent years have been moderate (Appendix 11). On the
other hand, he believes in sustainable development and climate change
mitigation.
4.12. Full-scale roll-out
Mr. Amador first thinks about creating a fund to implement the
carbon-neutral project. This fund could collect money by charging
premium prices for bananas and pineapples, and the company could
then invest those resources in compensation projects. However, Mr.
Amador must consider several important issues before implementing
a large project.
Dole should calculate the company's supply chain footprint in
order to decide who has to pay what amount. The company must answer the question of whether the consumer or producer has more responsibility in this area. The company should calculate the supply
chain footprint carefully and clearly.
At the same time, the company must assign responsibility for
emissions by determining the level of collaboration among all participants. Each link of the value chain has to agree and take responsibility for its own emissions amount.
4.13. Pilot project
Mr. Amador also considers a small project. Dole could start with a
pilot project to offer carbon-neutral fruits. Some Dole banana farms
Appendix 1. World market shares of banana companies
Source: The World Banana Economy, FAO and Banana link in: UNCTAD (2011).
Chiquita
Dole
Del Monte
Top3
Fyfess
Noboa
Top5
1966
1972
1980
1992
1995
1997
1999
2007
34
12.3
1.1
47.4
30.5
18
5.5
54
28.7
21.2
15.4
65.3
34
20
15
69
2–3
70
80
>25
22–23
15–16
62–64
7–8
12
82
24–25
25–26
16
65–67
6–7
13
86
25
25
15
65
7–8
11
84
25
26
16
66
8
12
86
B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
Appendix 2. Dole's differentiation strategy
Source: MCP (2009).
Appendix 3. Banana historical prices
Source: Index mundi (2009).
Evolution banana real prices
Source: World Bank (2007).
1805
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B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
Appendix 4.1. Bananas and pineapple comparative export quantity
Source: FAOstat (2009). Adopted.
Source: FAOstat (2009). Adopted.
Appendix 4.2. Costa Rica production volumes (2002–2007)
Note:*Banana box: 18.14 kg.**Pineapple box: 12 kg.
Source: CANAPEP(2009) and CORBANA(2009). Adopted.
B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
1807
Appendix 5. CO2 emissions
Pineapples
Bananas
Maritime
shipping
78%
Distribution
7%
Production
15%
Source: MCP (2009).
Appendix 6. Carbon footprint of bananas exported from Costa Rica to Europe
Source: MCP (2009).
Note:1.Costa Rica production destination on average in last 4 years:
Banana
US
Europe
51%
49%
Maritime
shipping
83%
Distribution
2%
Production
15%
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B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
Appendix 7. Carbon footprint of pineapples exported from Costa Rica to Europe
Source: MCP (2009).
Notes:
1. Costa Rica production destination on average in last 4 years:
Pineapple
US
Europe
42%
52%
2. Pineapple prices 2002
Year
Prices $USD
- 2007 on average:
2002
2003
2004
2005
2006
2007
5.0
4.9
4.7
4.7
4.8
4.6
3. Prices requested by CIMS /INCAE, price on pineapple farms equaled between $5.40 and $6.40. 04/2009
B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
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Appendix 8. Voluntary carbon market size
Note: Chicago Climate Exchange (2009).
Appendix 9. Standards for VERs
Source: Hamilton, Bayon, Turner, and Higgins (2007).
Standard
Project type
Pros
Cons
CCB
Land management
Gold Standard
Renewable energy, energy efficiency
− 10–20% price premium
− New, not well known
− Few projects
− 20–30% price premium
VCS
All
+ Support from NGOs
+ Focus on social benefits
+ High demand
+ Low risk
+ Support from NGOs
+ Focus on sustainable development
+ Broad acceptance
+ Support from international organizations
+ Broad acceptance
Appendix 10. GHG emissions by sector
Global Anthropogenic GHG Emissions by sector (2004)
Source: IPCC (2007). Adopted.
− Does not require country approval or stakeholder revision
− Considered a minimum standard
1810
B. Kilian et al. / Journal of Business Research 65 (2012) 1800–1810
Appendix 11. Dole financial overview
Source: MCP (2009).
Year 2008
Year 2007
Year 2006
Year 2005
Year 2004
$
$
$
$
$
Summary of operations in millions
Revenues, net
Operating income
Income (loss) from continuing operations before income taxes, minority interests and equity earnings
Income (loss) from continuing operations, net of income taxes
Income (loss) from discontinued operations, net of income taxes
Gain on disposal of discontinued operations, net of income taxes
Net income (loss)
7620
275
93
145
(27)
3
121
6821
149
(36)
(42)
(16)
–
(58)
5991
136
(16)
(42)
(50)
3
(90)
5638
229
87
45
(1)
–
44
5093
308
151
130
5
–
135
Balance sheet and other information
Working capital
Total assets
Long-term debt
Total debt
Total shareholders' equity
Cash dividends paid to parent
Proceeds from sales of assets and businesses, net
Capital additions
Depreciation and amortization
531
4365
1799
2204
403
–
226
77
139
694
4643
2316
2411
325
–
42
107
156
688
4612
2316
2364
341
164
31
119
149
538
4413
2001
2027
623
77
19
146
150
425
4327
1837
1869
685
20
11
102
145
Note: Discontinued operations for the periods presented relate to the reclassification of the company's fresh-cut flowers and North American citrus and pistachio operations to discontinued operations during 2008 and 2007, respectively, the sale of the company's Pacific Coast Truck operations during 2006 and the resolution during 2005 of a contingency
related to the 2001 disposition of the company's interest in Cerveceria Hondureña, S.A.
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