SDXAY Sodexo (PK)

SANTA BARBARA, Calif.--Trying to be environmentally friendly can be good business for companies, but it often has an unexpected result: It can change a company's foreign-exchange exposures and sometimes puts a damper on results.

Foreign-exchange risks don't usually figure into companies' pro-environment strategies. The environment programs are usually just based on a desire to preserve materials or get some good publicity. But every time a decision is made to do business differently across an international border, a company's foreign-exchange exposure changes, affecting its hedging needs.

Sodexo (SDXAY, SW.FR), the French food-service and facilities-management company that serves 50 million diners every week, announced this week that within four years, all the fish it buys must be certified by an environmental nonprofit to be sustainable. That's in line with the company's plans to move toward feeding its customers food that's better for the environment and their health.

But what happens if Sodexo's suppliers can't get the certified fish because, for instance, a massive oil spill interferes with fishing? Suddenly, the fish its vendors sell could be coming from a different country.

Something similar to that happened recently when frost hit tomatoes growing in Mexico and Florida, a combination that forced Sodexo to substitute beets on some salad bars it serves. In December, snow ruined Brussels sprout harvests in the U.K., forcing food companies to make similar substitutions.

"Increasingly we're seeing local failures affect our supply chain," Arlin Wasserman, Sodexo's vice president of sustainability and corporate social responsibility, said at The Wall Street Journal's ECO:nomics Conference. "Suppliers have to be more nimble and search around the globe."

Sodexo said last month that its first-quarter results showed a 5.9% positive currency impact in total. The company said that it accumulates expenses and revenues in the same currency wherever it does business, minimizing its foreign-exchange impact and probably its need to hedge.

As part of its sustainability program in 2009, Bayer (BAYRY, BAYN.XE) started selling bottles of its Aleve pain medication without boxes. Less packaging meant less waste, but it also meant the expense of purchasing the box disappeared. And depending on where a company sources that extra packaging, such a move can also mean eliminating FX exposure.

-By Chana R. Schoenberger, Dow Jones Newswires; 212-416-4803; chana.schoenberger@dowjones.com

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