In a study of 350 of the world’s largest food and agriculture companies, many big food companies were found to be “failing dismally” on key ESG issues, including climate change and human rights. Of the 350 companies studied, only 26 are working to reduce greenhouse gas emissions, 309 aren’t doing enough to eliminate forced labor, and 201 aren’t prioritizing healthy foods, according to the report.
Some food companies are prioritizing environmental, social, and governance (ESG) efforts. For instance, Nestle, a food brand that has committed to a net zero pathway, was recently cited as the only food brand in the Top 100 companies, judged purely on ESG metrics, per a recent Wall Street Journal survey.
And ice cream icons Ben & Jerry’s are well-known and respected for their social responsibility stance. They prioritize environmental and social endeavors, donate a portion of their earnings to social causes, and use eco-friendly production methods.
But, as an industry, we still have a long way to go. While the WSJ survey spotlighted Nestle for their positive ESG contributions, they were the only food brand in the Top 100 companies. We must do better.
Why is ESG important?
Increasingly, consumers – as well as other key audiences like employees and investors – are demonstrating that ESG factors are important as they decide where to purchase, work, and invest. They’re investigating companies’ behaviors and attitudes around issues like climate change, deforestation, human rights, and equality, and using this information to determine whether they want to align with a particular brand.
As sustainability moves to the forefront for many audiences, they’re demanding more traceability around the products they buy and companies they support. This has led to more informative labeling, more detailed information around foods’ origins, as well as rising demand for safety and ESG certification and standards. As people become more vocal about the practices that they find appealing – or unacceptable – food brands are learning that they need to act – or get left behind.
An increased demand for safety and ESG certifications
Many food brands are working to accelerate their ESG efforts. As part of this initiative, they’re taking a closer look at their suppliers all along the supply chain. Food businesses are demanding to know whether their suppliers are practicing proper safety protocols and supporting ESG goals – and requiring the documentation to prove it.
Food businesses – and their customers, employees, and investors – want to know where their food is coming from, if it’s safe, and if it meets the latest ESG guidelines. People want to work for, buy from, and invest in purpose-driven brands, and often research companies to ensure they’re operating sustainably and purposefully.
But even with the best intentions, food brands can’t successfully reach their ESG goals without accurate, real-time data for more informed decision-making. In other words, food brands can’t improve what they’re not measuring. So, how do they track and manage ESG efforts throughout their supply chains?
Tech tools increase transparency
The food industry is starting to embrace technology to elevate every aspect of their operations, and that includes ESG efforts. For instance, digital tools are helping food brands become more sustainable and responsible by cutting waste, elevating safety protocols, ensuring environmentally friendly production, and more. Now, food brands can also leverage tech tools to increase transparency throughout their supply chains.
Today’s innovative software tools:
- Track supplier safety certifications so operators can see which suppliers are committed to strong ESG and safety practices.
- Organize supplier certifications into a centralized system that food brands can see and manage.
- Allow food businesses to make more informed decisions about which suppliers to work with – and which to avoid.
- Are user-friendly, accessible, and affordable.
- Streamline processes to save time and reduce redundancies, errors, and data entry for a more efficient, accurate experience.
- Implement easily, with no onboarding or training required.
- Are disrupting traditional market software.
ESG is critical for business growth
Key audiences are expecting food brands to mirror their values and demonstrate a commitment to sustainability and social justice issues to earn their loyalty and business. Many people truly care about an organization’s purpose and culture and use ESG metrics to inspire their decisions about where to buy, work, or invest.
As an industry, we must address ESG issues, including water and energy waste, the use of harmful pesticides, climate change, racial and gender equality, DEI, fair trade, and human rights. Moving forward, sustainability efforts will help drive business growth.
Key audiences want to know where their food is coming from, and demand sustainable practices through every step of the supply chain. They aren’t just thinking about how the food they consume will impact their health, but also how it will impact the environment.
