Leading the charge to net-zero

The race to net-zero is gaining momentum with the major players in the grocery sector taking significant strides towards sustainability. Case in point, supermarket chain Sainsbury’s recently pledged to meet Science Based Target initiatives (SBTi) validated goals. This commitment includes reducing greenhouse gas (GHG) emissions by 68% and achieving a net-zero target by 2035.

This ambitious move sets powerful precedent, urging food and beverage (F&B) companies to align with these important environmental objectives, or risk being left behind. This isn’t an isolated effort either. Supermarket chains like Tesco and Sainsbury’s signify a growing trend of major retailers adopting a proactive stance on environmental responsibility.

Sainsbury’s commitment to sustainability is expected to trigger a domino effect as the retailer assesses its procurement processes to favour sustainable partners throughout its supply chain. By aligning with these net-zero targets, F&B businesses become valuable partners to grocery giants and others following their footsteps, unlocking new growth opportunities.

Building successful alliances with supermarket giants requires food and beverage companies to understand their priorities, building a mutually beneficial relationship, not exclusion. Three primary goals remain crucial for retailers:

1. Profitability
2. Consumer demands
3. Operational efficiency

By aligning with these objectives, F&B companies directly address consumer demands. When they understand retailer priorities and offer mutually beneficial solutions, they unlock the door to successful and sustainable partnerships within the grocery trade.

Significant progress can be made towards sustainability when F&B companies move from merely “considering” to fully adopting a transparency-driven mindset. This involves being forthright about practices, such as publishing sustainability reports where possible, and clearly defining sourcing strategies.

Companies can start by evaluating existing practices, identifying areas with the most significant environmental impact, such as energy consumption or waste production. It’s important to note that while extensive data tracking might not be possible for all at first, basic estimations can be beneficial. Businesses can focus on easy-to-implement changes where simple improvements can make a substantial impact. Actions, such as shifting to energy-efficient LED lighting, implementing clear initiatives on reducing the use of plastics, or exploring local sourcing options to minimise transportation emissions are all steps businesses can take in the right direction.

Key stakeholders and business decision-makers will appreciate concerted efforts, even on a smaller scale.

Food and beverage companies should aim to be transparent and communicate their sustainability initiatives openly across social media channels, websites, or even product packaging labels. Danish dairy company Arla is a prime example of a company that executes this well. They have clearly demonstrated their sustainability efforts and can serve as an inspiration for companies improving their unique approach

While environmental impact is a critical component of sustainability, progressive F&B players should embrace “double materiality”. This concept goes beyond traditional sustainability metrics by acknowledging the dual impact a business has on the world from both environmental and social perspectives.

The double materiality framework helps companies understand the reciprocal relationship between businesses and the environment. It aids them in assessing how factors, such as climate change, water shortages, or resource depletion could affect their supply chains, increase costs, and impact the availability of key ingredients. Conversely, it allows them to see how their operations impact the environment and communities.

The concept of double materiality may seem daunting for smaller F&B companies with limited resources, especially considering its origin in the European Union’s Corporate Sustainability Reporting Directive (CSRD) which initially focuses on larger businesses. However, double materiality offers an accessible framework for smaller businesses, and even small steps towards adopting this approach can yield significant benefits.

Start by identifying processes and operations with maximum environmental and social impact, and where the company can make the most genuine change. This includes areas, like sourcing practices (such as fair trade certifications for key ingredients) or labour practices (think fair wages and safer working conditions).

Sainsbury’s commitment to net-zero is another wake-up call for the wider industry to take proactive steps towards their sustainability efforts. In doing so, food and beverage companies can move from just mere suppliers to strategic partners to grocery giants on the net-zero journey, riding the wave of change.

Moving beyond supplier status requires pre-emptive relationship building. Smaller F&B companies can leverage their agility by focusing on local stores and chains to identify areas where products or practices can genuinely complement their objectives.

Successful partnerships thrive on mutually beneficial relationships, allowing grocery stores to connect with suppliers who share their sustainability goals, while smaller F&B companies expand or secure a broad and discerning customer base and potential for growth. Embracing sustainability not only fosters growth but also contributes to a more sustainable future for the entire grocery ecosystem, securing long-term success and a healthier planet for generations to come.