State of Sustainability Summary: The Biggest Sustainability Data Revelations (in F&B)

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 four that we found shocking, reassuring and confusing.

Revelation 1: Most companies will only consider environmental food labels if they’re mandatory

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The biggest problems facing food product labelling is a lack of standardisation and customer understanding. The clearest ask for 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 is creating a stalemate.

Whilst this is happening, there are a few cool opportunities to look at:

1. Food labels as a B2B tool - suppliers tend to be more carbon-literate than customers, and the use of labels is a great way to communicate transparency throughout the value chain.
2. 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: We’re even less ready for FLAG than we realised

It's no surprise that companies aren't ready to set FLAG targets in the next few months - but we didn't realise that even the next few years feel like a stretch. Very few companies are accounting for their emissions from land use and agriculture, for four main reasons:

1. What is FLAG anyway? - many in the room, and perhaps the majority hadn’t even heard or started thinking about setting FLAG targets.
2. It’s an SBTi thing - the main driver for FLAG is to comply with SBTi’s requirement that food companies setting an SBT must also set a FLAG target. This means companies are holding off on FLAG if they already have SBTs or have de-prioritised setting an SBT target.
3. Unclear and changing guidance - the existing guidance for accounting for FLAG emissions is open to interpretation. The GHG Protocol has pushed back the publication of its accounting guidance to 2024. So, companies are hesitant to start calculating FLAG if final guidance is about to change.
4. It’s another time sink - FLAG often falls to one person or a small team in most companies. For a lot of sustainability professionals, this is just another work stream that consumes resources.

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What’s Next?

Finalised guidance and demand for SBTs will drive more FLAG accounting, but that surfaces other issues. Companies want to tell a story about how their products and practices are better than others, but targets only create comparisons with yourself.

1. How do targets for companies with naturally lower-emitting products (e.g. meat alternatives) compare with those for high-emitting products (e.g. meat)?
2. How can net-carbon stock accounting show that a farm currently following good practice is better than a neighbouring farm moving away from intensive practices?

So what to do? FLAG is coming regardless. Improved farm-level data on farms will create 3 distinct opportunities:

1. This will be a conduit for direct engagement and longer-term support for farmers.
2. More data to measure the impact on biodiversity and nature, and therefore improve visibility on ways to invest in nature
3. Regenerative practices will likely entail a rebound period for yields as soil recovers over a few years, so at least on the data side FLAG can show an immediate positive impact on emissions.

Revelation 3: Even the biggest companies are stuck when it comes to supplier engagement

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Getting supplier data at all stages of maturity in a food company’s sustainability journey is painful. The key reasons are:

1. 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.
2. 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.
3. Data sharing is feared - 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 don’t want 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 that suppliers only share data once in a consistent format.

Revelation 4: We are sick of talking about ‘collaboration’
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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:

1. What to even collaborate on
2. How to collaborate with peers without losing competitive advantage
3. How to pitch a sustainability collaboration internally

The most fruitful areas of collaboration are probably within your own supply chain, and amongst a wide group of different actors (regulator, industry body, supplier, retailer, producer). Great positive examples of collaboration that came up include:

1. 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 on how to achieve different outcomes.
2. Long-term supplier relationship - a key element in collaboration is trust, so some of the most successful examples 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.

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Register interest to attend State of Sustainability IMPACT 2024