1. For some years now we have found ourselves dealing with a products and services communications and marketing model in which, if the word “sustainability” is missing, the product and/or service seems nearly worthless.
But, how valid is this? Shouldn’t sustainability be a standardized process, like quality, safety and compliance?
A: The problem we have faced is that there has been a great deal of ‘greenwashing’ by companies to enhance the sustainable credentials for their company, products or services.
What Is Greenwashing? Greenwashing is the process of conveying a false impression or providing misleading information about how a company’s products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly.
For example, companies involved in greenwashing behaviour might make claims that their products are from recycled materials or have energy-saving benefits. Although some of the environmental claims might be partly true, companies engaged in greenwashing typically exaggerate their claims or the benefits in an attempt to mislead consumers. Greenwashing is a play on the term “whitewashing,” which means using misleading information to gloss over bad behaviour.
The issue this then causes is that consumers do not believe any sustainability or environmental statements which then has a negative effect.
The second big issue we have is that there are 455 eco or environmental labels globally, across 199 countries and 25 industry sectors. No wonder that consumers are confused about the messaging on products.
Ideally, there should be a global standard which everyone can understand and every business can measure themselves against but unfortunately there isn’t one.
2. What areas does the current concept of “sustainability” encompass? The truth is that, under it, a whole range of different topics is discussed: “climate change”, “gender equality”, “the environment”, etc.
A: This is where again it can get complicated and confusing as governments around the world have their own commitments, goals & legislations. There was a focus on CSR, Corporate Social Responsibility which is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to them.
Now this has been superseded by ESG, Environmental, Social & Corporate Governance, this is an evaluation of a firm’s collective conscientiousness for social and environmental factors. It is typically a score that is compiled from data collected surrounding specific metrics related to intangible assets within the enterprise. It could be considered a form of corporate social credit score. These three broad categories is termed used to define “socially responsible investors”, i.e. the investors who consider it important to incorporate their values and concerns (such as environmental, governance, or community concerns) and than form investment decision rather than just potential profitability towards.[1]
ESG’s three central factors are:
Environmental criteria, which examines how a business performs as a steward of our natural environment, focusing on:
- waste and pollution
- resource depletion
- greenhouse gas emission
- deforestation
- climate change
Social criteria, which looks at how the company treats people, and concentrates on:
- employee relations & diversity
- working conditions, including child labor and slavery
- local communities; seeks explicitly to fund projects or institutions that will serve poor and underserved communities globally
- health and safety
- conflict
Governance criteria, which examines how a corporation polices itself – how the company is governed, and focuses on:
- tax strategy
- executive remuneration
- donations and political lobbying
- corruption and bribery
- board diversity and structure
3. When a company wants to make a commitment to a greater contribution to Sustainability, what management tools does it have at its disposal?
A: There are many ESG, Environmental, Social & Corporate Governance software tools that companies can use. These software tools can capture & manage ESG data in a single system of records and automate the end to end reporting process to reduce ESG reporting time & costs.
4. Is it more expensive to be sustainable? Do you know of any success stories that can serve as an example?
A: Not necessarily, however in many cases more sustainable products costs more than less environmentally friendly products. Why is this? It’s all to do with the economics of the materials & production methods with creating a more sustainable product. The conundrum we face is that smaller production using new, innovative & sustainable materials find it extremely difficult to compete with mass produced products using well establish cheap plastics. However, this is now changing, as volumes of more sustainable products increases the volumes of the more specialised materials increases, therefore decreases the prices. There will be a tipping point when sustainable products will be able to compete with their more unsustainable counterparts.
5. What methodologies could be said to be most effective in identifying the materiality of the different stakeholders ? Can you tell us about any experience in this regard?
A: You have to look at independently verified companies who can audit companies to ensure the sustainable credentials of a company. In my experience the way to do this is to deal with companies that have sustainable accreditations like ECOVADIS. If you are a Large or Small, Public or Private: ECOVADIS are the Only Universal Sustainability Ratings Provider. EcoVadis helps you manage your network both upstream and downstream, either by sharing your performance with your stakeholders or monitoring the performance of your own upstream value chain. Tens of thousands of companies partner with EcoVadis to collaborate on sustainability with a common platform, universal scorecard, benchmarks and performance improvement tools. (www.ecovadis.com)
6. In order for an organization to be successful implementing a Sustainability project, what factors must it effectively address? What are the mistakes to avoid?
A: Firstly, before starting the project is needs to have a defined scope of what you are trying to achieve and why you are doing it. The big mistake companies make is that they think they know the answer to the project before they kick it off and then try to steer the project to just give them the answer they wanted at the beginning. The second mistake that companies make is that they have the wrong people or not a broad enough team to ensure the success of the project. The project team must have representatives from all areas of a company to succeed, senior management, sales, procurement, operations and maybe even an external representative like their customers! Why would you not include your customers into your project?
7. When can a company be considered sustainable?
A: This is a very different one to answer as there are different shades or green or levels of sustainability. Every company has to start on their sustainability journey somewhere and there is no shame in only being at the beginning of that journey. There are published list of the ‘Most Sustainable Global Companies’ but it takes a huge amount of time, investment and passion to be able to call yourself a truly sustainable company. You have to embed it into your companies DNA, you have to life and breath it and ensure that it flows through every part of your business.
It’s not easy being a sustainable business but we all know it’s worth it and can be hugely rewarding and also also hugely costly if you are not. In a recent report by Deloitte entitles, Shifting sands: Are consumers still embracing sustainability?, they highlight the change in consumer thinking. The big finding from this report is that consumer do value sustainable & ethical brands. One of the questions was asked if consumers would be prepared to pay more for goods & services, to ensure the brands create them by using environmental, sustainable or ethical practices. The results were loud and clear, 50% of consumers asked said that they are willing to pay more for environmental or ethical brands.
So that was the positive from the report and now for the negative, the report said that 45% of Gen Z or Under 24’s have stooped purchasing certain brands because of ethics or sustainable concerns. So this is a warning to all those unsustainable companies, if you don’t change then you could lose 45% of your potential customers!
8. Which indicator, or indicators, could give us information about a Sustainable Company Level?
A: As discussed before, ECOVADIS gives a rating for each company who goes through their audit process, so it’s easy to understand. They have sustainability scoring for over 85,000 companies in 160+ countries, across 200+ industry sectors. The criteria for from their scorecards published from 1 January 2022 are as follows:
Platinum – top 1% (overall score between 75 and 100)
Gold – top 5% (overall score between 67 and 74)
Silver – top 25% (overall score between 56 and 66)
Bronze – top 50% (overall score between 47 and 55)
So this gives you a clearly defined level or indicator of sustainability which you can compare.
9. Based on your experience consulting on sustainability projects, what are the biggest changes companies experience when they try to implement them? You can give us an idea of what changes occur amongst workers and managers, and also how they impact production processes.
A: One of the biggest changes we are seeing is that sustainability is now firmly sitting at board level within companies now. This wasn’t always the case as it was given to someone as an extra job to do and that has now changes which was needed. You now need to have ‘Sustainability Champions’ across the whole of your business to succeed.
The impact is now being felt within companies who have a knowledge gap, a gap which means it is starting to impact their business performance. To highlight a point, it is widelt acknowledged that 80% of the environmental impact of any product or service is determined at the early design stage. So if you do not have a joined up sustainability process for design, materials, production and waste recycling then you are never going to get it right. Doing one thing right is not good enough anymore, so have to join everything up to truly deliver on sustainability.
10. Where do you think consumers’ responses to all this information they receive about sustainable products and services are headed?
A: Consumes just want to have clear & simple guidance on the products they are buying, the where they come from, ingredients, packaging etc, so transparency is going to be the next big thing is sustainability with consumers.
11. In order to guarantee that organizations’ follow through on their promises, do you think that sustainable product certification is a reliable tool for consumers?
A: If an organisation makes promises on sustainability then ultimately, they will be held to account by their customers. Of course, annual accreditations which are externally verified are important to hold companies to account and this clearly demonstrates to their customers that they are meeting or even exceeding their sustainable commitments.
Product certification is a reliable tool for consumers if the certification is again, externally verified.
12. What are the certifications in the field of Sustainability? Which do you think are the most relevant or reputable?
A: There are many sustainability certifications which are the big ones which consumers will look out for FSC – Forest Stewardship Council will ensure that all fibre used come from responsible sources, Sedex, which is a membership organisation that certifies responsible supply chains, ISO14001 which is for companies & organisations of any type that wants to have a structured approach to their companies environmental processes.
I have outlined ECOVADIS but another extremely important one if B Corp, B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials. In order to achieve certification, a company must:
- Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above and passing our risk review. Multinational corporations must also meet baseline requirement standards.
- Make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders, and achieve benefit corporation status if available in their jurisdiction.
- Exhibit transparency by allowing information about their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website.
13. What magazines, websites or books would you recommend to someone who would like to start learning about these issues?
A: There is a huge amount of sustainably focused websites which can really give you huge amounts of information & learning material. It really depends on what sector you are in as to what websites you access to get your information. Bloomberg Green is a great one which gives a broad view on sustainability, Sustainable Brands is a perfect way to see global brands & retailers and their sustainability updates. If you more focused on retail then go to GreenRetail. World where you can get the latest on all things sustainability in retail.
Interview with Steve Lister, Global Retail Sustainability Strategist and Head of Sustainability POPAI UK & Ireland. Over the last 15 years he has been recognised globally for helping brands & retailers reinvent in-store shopper marketing strategies to increase impact & engagement to win against competitors.
