Fiscal 2020 Universal Registration Document

5. Corporate governance


Risk of not keeping and renewing contracts with Sodexo’s existing clients.

  • Risk Timeframe: Medium Term
  • Category: Client & Consumer Centric

Sodexo’s clients have been impacted to a greater or lesser extent in all segments by the Covid-19 pandemic in Fiscal 2020. Periods of lockdown, where large populations have been confined to their homes mean partial or full closure of client premises for weeks or even months. In the Education sector, for example, some countries did not open schools or universities for the rest of the academic year.

As clients re-open their premises, their needs have changed: offices and schools have to be re-configured to adhere to social distancing requirements, more intensive cleaning may be needed, and the food offer has to be more flexible, as employees continue to work partially from home. For example, the traditional workplace food offering – an on-site kitchen providing food to on-site employees at set hours – is evolving.

Sodexo needs to work with its clients pro-actively as a partner to adapt to changing circumstances and continue to meet evolving client needs. A lack of ability to adapt to the client’s current circumstances, an inability to transform our services to remain attractive to meet client/consumer demand, or any changes in client outsourcing strategy could mean that the client is not retained, possibly leading to:

  • less growth;
  • decrease in profitability;
  • loss of credibility in the market place.
Examples of Mitigating Activities
  • On-site teams continually listening to the client and the consumer.
  • Strengthening of the client relationship management process to ensure alignment with client expectations on an on-going basis.
  • Rise with Sodexo, launch of a combined On-site Services and Benefits & Rewards Services global program dedicated to the re-opening of client offices and sites.
  • Ability to offer new services to respond to client challenges (disinfection cleaning, welcome back to work packages, virtual concierge).
  • Client relationship management tool.
  • Monitoring at global level of retention in the client portfolio.

Increasing consumer expectations around personalized and innovative services, healthy food choices and a comfortable environment; increasing consumer expectations in relation to Company business conduct and environmental impact.

  • Risk Timeframe: Short/Medium Term
  • Category: Client & Consumer Centric

“Empowered consumers” is one of 11 megatrends that Sodexo has identified in its markets. Consumers are increasingly voicing their opinions and clients are taking their opinions into account. Consumers expect more choice, more convenience, healthier options and socially responsible behavior from the companies from which they receive service. Specific examples that Sodexo has had to take into account include:

  • increased use of digital platforms for delivery of meals;
  • rise of demand from our consumers for plant-based food that is less carbon intensive;
  • reduction of single use plastics to reduce marine pollution;

Moreover, the Covid-19 pandemic has accelerated the consumer empowerment trend, with consumers working remotely on a regular basis, or even full-time.

If Sodexo cannot adapt its consumer offer or cannot anticipate and meet consumer expectations for innovation and in relation to environmental impact or business conduct, its revenues, as well as its reputation, could be affected.

Examples of Mitigating Activities
  • B2C food delivery offers (e.g. Deli Express by Sodexo in Brazil and Singapore ).
  • Digitally enabled food services with apps that offer mobile ordering, cashless services, rewards programs and digital management of meal benefits (e.g. Bite in the Education segment, Zeta in India).
  • Partnering with startups in the Sodexo Accelerators program.
  • Better Tomorrow 2025: Sodexo’s corporate responsibility roadmap, that sets out 9 commitments based on their impact on individuals, communities and the environment.
  • Roll-out of 10 Golden rules of nutrition, health and well-being.
  • Sodexo employs more than 5,700 dieticians worldwide.
  • Sodexo’s Code of conduct, the “Business Integrity Guide” sets out Sodexo’s standards for business integrity.
  • Global Ethics & Compliance Committee supports programs throughout the Company.