Optimising your Climate Labelling Strategy

From imperfect beginnings to iterative success, Oatly was one of the (if not the…) first brands to add climate labels to their products in 2019. Today, Oatly's European product range proudly boasts carbon labels, extending this transparency to North America earlier this year. Yet, product carbon footprints on packaging are meaningful only when people have something to compare it to.

Enter, stage right: Oatly’s Dairy Deal Campaign, offering free advertising space to dairy companies in exchange for disclosing their carbon figures. This campaign is also a platform for constructive discussions with government bodies about labelling standards.

We chat with the AMAZING Shaunagh Duncan, Head of Sustainability, Europe & International Markets at Oatly, who shares her advice to fellow professionals setting up (and transforming) a climate labelling strategy.
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What are some of the challenges to expect?

• Lack of standardisation. There is no agreed methodology on how to measure the environmental impact of food. Oatly uses a Life Cycle Assessment approach, but few LCAs are the same, which makes it challenging for people to accurately compare their food and beverage choices.
• Logistically complex. Creating labels that work in different markets (e.g., the EU and the US), whilst maintaining similar pack formats and artwork is logistically challenging. On top of this, the ever-evolving labelling landscape adds to the complexity.
• Resource intensive. Getting hold of data is always an imperfect science, requiring dedicated efforts (in Oatly’s case, a dedicated LCA team). Once you collect the data, run the calculation you also want to get it independently verified (this is also expensive).
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How can businesses benefit from carbon labelling?

• Innovation: It helps to hold the whole business  accountable and makes it easier for  sustainability to be considered at every stage of product development, encouraging product efficiencies and innovations.
• Team alignment: With the carbon numbers, Oatly sets clear targets, tracks progress and aligns the company behind its overall  ambition to reduce its climate footprinting by 70% per litre of Oatly produced by 2029.
• Brand equity. Packaging serves as prime real estate for marketing. By displaying carbon numbers on every carton, Oatly showcases transparency, building brand image and consumer trust, even if the numbers aren't fully understood.
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Advice for sustainability professionals:

• Invest in internal collaboration:- Bring your branding and creative team on board. Look for industry examples to show that it can be additive to the look and feel of the brand (check out DEYA as an example).- Establish a process with the product team. Try and get hold of the data before the development or launch of a product. Use this data to inform a lower-impact option. So often teams do it retrospectively and risk ending up with higher numbers that aren’t aligned to your overall sustainability objective.

• Practise smart prioritisation. Set guidelines for updating data. Oatly used to update their numbers every year. This sometimes resulted in minimal changes, not justifying the time spent on recalculations. After trial and error, Oatly now prioritises recalculations when there is a dramatic change that will impact the numbers (e.g., supplier or sourcing changes).
• Explore existing labelling schemes. Piggyback on established schemes that exist and are gaining traction e.g., Foundation Earth, rather than establishing your own method.
• Engage with peers. Get a coffee (with Oatly). Speak to others and learn from their experiences.

The window to be a pioneer brand in climate labelling is closing. It is likely that you are going to have to do it one day, you might as well get ahead of the curve and benefit from first-mover status.

Check out Oatly’s Dairy Deal Campaign.

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