We recently hosted our inaugural ‘State of Sustainability’ conference. In a room of 60+ F&B sustainability professionals (representing over 400MT of emissions), we covered the common conclusions - ‘collaboration is good’, ‘supply chain engagement is hard’, ‘Scope 3 is a mess’…But thankfully there were some insights that genuinely surprised us. So here are three that we found shocking, reassuring and confusing.
Revelation 1: Most companies will only consider Environmental food labels if they’re mandatory
The biggest problems facing food product labelling is a lack of standardisation and customer understanding. The clearest ask from the day was for a mandatory standard on food labels. Until this happens, companies see it as too risky in time and capital to invest in labels. If anything, there is an expectation that they will become mandatory which, in the meantime, is creating a stalemate.
Whilst this is happening, there are a few cool opportunities to look at:
Food labels as a B2B tool - suppliers tend to be more carbon-literate than customers, and labels are a great way to communicate transparency throughout the value chain.
Other ways to inform customers - labels alone may not inform customers, but adding context in other ways can e.g., low carbon product ranges.
Revelation 2: Even the biggest companies are stuck when it comes to supplier engagement
Getting supplier data at all stages of maturity in a food company’s sustainability journey is painful. The key reasons are:
Data requirements aren’t clear - this is a problem in many sustainability teams (even more so in the teams of upstream suppliers). Companies need to know what data fields are required (or superfluous), and suppliers need clarity on what data to collect.
Data requests are time intensive - sustainability teams spend too long putting together data requests. This gets even worse for suppliers dealing with multiple requests across all formats e.g., PDF and spreadsheet formats. Excel is the best of these rudimentary options but has major issues with edit rights and version control.
Data sharing isfeared - there is a substantial amount of secrecy and feet-dragging in some supply chains. Part of this is down to IP concerns. With more granular data requests suppliers are hesitant to expose their proprietary techniques.
This can be fixed! With clear and consistent data requirements and better ways to share data. Solutions such as PACT and SAI Platform help, requiring suppliers to only share data once in a consistent format.
Revelation 3: We are sick of talking about ‘collaboration’
Everyone knows collaboration is important. But we are sick of the concept of collaboration. There are a few key things that are blocking transforming ‘collaboration’ from concept to action. We don’t know:
What to even collaborate on
How to collaborate with peers without losing competitive advantage
How to pitch a sustainability collaboration internally
The most fruitful areas of collaboration are probably within your own supply chain, and amongst a wider group of different actors (regulator, industry body, supplier, retailer, producer). Great positive examples of collaboration that came up include:
Landscape approach - tie different actors together (water companies, local governments, food product manufacturers etc.) at the landscape level to invest in the benefits of better farming practices. This can be channelled to the farmers who are best placed to innovate to achieve different outcomes.
Long-term supplier relationship - a key element in collaboration is trust. Some of the most successful initiatives come where trust has been built over a 30+ year relationship. Establishing trust makes it easier to suggest changes to practices whilst creating a greater willingness to accept some failures.
The Highlights - State of Sustainability: Impact Event. Watch here.
Let’s dispel one myth from the get-go: there isn’t a single carbon price across companies and, while it may be influenced by carbon taxation, it’s not the same thing.
Carbon pricing is in most cases an internal assumption (similar to a discount rate, for those familiar with building business cases using Net Present Value or IRR) informed by the company’s own analysis and experience.
A better way for what we call a ‘carbon price’ is actually a ‘carbon cost’. It should represent the cost of decarbonisation (rather than a price which you’re paying to acquire carbon).
Tune in to hear how to effectively use and set carbon costs to avoid unexpected spending on initiatives.
Policy Pulse | The Latest Sustainability Developments: EU Deforestation Law (EUDR) and What This Means for Business
The majority of deforestation (up to 80%) is due to agriculture, so authorities, including the EU, UK and US, are all introducing laws to prevent deforestation. The EU legislation is the only one that has been passed into law so far (as of June 2023). Here's a breakdown of what the EUDR means for your business:
What is theEU- Deforestation Regulation (EUDR)?
The EUDR outlaws any deforestation in the supply chains of 7 key commodities; palm oil, soy, wood, cattle, cocoa, coffee and rubber, obligating companies to evidence this with their own due diligence.
The deforestation laws target all companies that sell any of the affected commodities, or any derived products of them.
Note that there are no business size requirements, meaning all companies dealing with the covered commodities will be obliged to conduct due diligence.
What you need to know about the EUDR:
Each product needs to have a due diligence statement submitted - it is the responsibility of producers and traders to conduct due diligence and submit a statement that a product has passed. This statement will be electronic via a platform in current development.
Non-compliance is punished heavily - any product that doesn’t pass a risk assessment cannot be sold in the EU. Any sold goods that are found to be linked to deforestation will be withdrawn and revenues from sales confiscated. Fines of up to 4% of EU annual revenue can be administered, and a 12-month ban from selling other products.
The EU legislation effectively asks companies to do two things:
Collect data - for each affected product on the commodity quantity (in kg net mass) and origin country. They also ask for geo-tagged location data tying the commodity to its exact production area and production timeframe. Top tip: The best place for businesses to start is working with their supply chain to collect their sourcing data.
Conduct risk assessment - this is to show there is negligible risk of deforestation by assessing a host of country and commodity risk factors. Top tip: The EUDR does not allow certification schemes to stand instead of due diligence requirements. Even so, schemes can help by providing the data for company checks. Schemes such as RSPO and FSC can help to build the data infrastructure for supply chain traceability. This will apply to companies from 30 December 2024.
What to expect going forward:
Widening deforestation scope: the EU is planning a review to consider outlawing land conversion from wetlands, peatlands and grasslands as habitats. The commodity list may also expand, with other commodities that could be covered including maize and other biofuels.
Being naked is the #1 sustainable option. Reformation is #2. This is a punchy narrative, one which Reformation truly champions. Here's our take on how Reformation weaves sustainability into every fibre of every product:
Mission Brand: Reformation’s brand is anchored in honesty and transparency. In fact, every Reformation piece wears its environmental impact on its sleeve (literally). Product labels disclose the exact amount of CO2 emissions and water used during production, empowering customers to make well-informed choices. This commitment to transparency holds team members, across the business, accountable for upholding the highest sustainability standards.
Team Alignment: Reformation’s CSO has a prominent role in shaping the R&D budget. By fostering a close partnership between the sustainability and R&D teams, Reformation integrates sustainability seamlessly into the decision-making process. This synergy leads to innovative and sustainable alternatives in materials and fibres (check out Reformation’s holy grail of fibre’s TENCEL™).
Product consumption: How the product is consumed is often overlooked by sustainability teams… but can sometimes be the easiest to do. Reformation goes the extra mile to educate and inform consumers about responsible clothing care. Alongside promoting eco-conscious garment maintenance (e.g., adding a low or no heat washing instruction tag), they incentivise customers to re-wear, resell (threadUP) and recycle (SuperCircle) with “Ref Credit”.