Can B2B Sustainability Investments Actually Pay Off?

B2B companies don’t always see commercial payback from sustainability investments.

I’ve recently heard this concern from a few large packaging companies. I sounded out my response to Patrick Shewell in the latest SOS podcast.

Here’s my general advice to packaging suppliers:

• Wrong timing: In most cases quality and cost still trumps sustainability. But hold tight, with tax breaks and policies like EPR catching up, putting the groundwork in now will help further down the line.
• Wrong person: Procurement teams may struggle to reconcile hard goals (dollars saved) with sustainability value. You need to win over someone for whom this is a problem e.g., they have KPIs linked to sustainability - find yourself a Patrick Shewell.

Here are two great points Patrick added:

• Build a sophisticated business case: Don’t just pitch new packaging solutions. The team you’re pitching to will fight for their share of the budget. Make it easier for them and demonstrate the tangible ROI. Identify brands in the portfolio where the packaging swap makes most sense, or which market will best suit based on EPR and tax.
• If all else fails, find another initiative: Sometimes, the hard truth is that while your initiative may impact sustainability, it’s just not one of the highest priority initiatives for the customer (vs other opportunities). Either pitch something else or be prepared to play the long game.

Getting it right can help to develop a strong customer lock-in.

A great example is Amcor, one of Mondelēz’s direct packaging suppliers.

Amcor launched an initiative to collect flexible plastics for recycling in Australia. While the initiative wasn’t a 100% success, Amcor's collaboration strengthened its position as a strategic partner for Mondelēz.

Saif Hameed, CEO of Altruistiq

Events

• Women in Sustainability Garden Mixer, Maximising and Managing Sustainability Budgets, August 22nd, London. Register interest.
• Webinar: How to Create a Useful Product Carbon Footprint, 20th August, 3-3.45 pm (BST), Online. Register interest.
• State of Sustainability F&B Summit, 10th October, Register interest.

Ask an Expert: How Should You Communicate Product Related Sustainability Claims?

Question: We have developed 3rd party verified Environmental Product Declarations (EPDs). The next step could be to communicate them. However, the results are lower compared to others (different dataset, different calculation method compared to e.g. PEF) and our results will also change over time.

Would you recommend communicating these results?

Answer: “Comparative claims are more impactful than absolute claims”

Steer on the side of caution when it comes to making product-related claims, particularly if values are likely to change over time and if there are ongoing methodological improvements (e.g. Product Environmental Footprint (PEF) alignment).

There tend to be two use cases:

B2C: 3rd-party verified comparative or reduction claims are more impactful than absolute claims. In our experience, absolute claims can lead to more confusion. But saying that a product is typically “X% less emitting than another product” will more likely resonate with consumers. This is particularly compelling as a challenger brand (e.g., Oatly vs Milk, Flora vs Butter).

B2B: To maximise the commercial opportunities, it’s worth considering two areas:

• Data exchange standards e.g., PACT: PACT facilitates the exchange of granular, accurate and verified primary data across your supply chain with standardised calc methods and data exchange frameworks. This helps to build trust and transparency with customers (even if your results are higher).
• Commercial upskilling: empower marketing and sales teams with the knowledge to speak confidently on your product’s environmental profile with customers. This will help them leverage the EPD data for commercial opportunities e.g., price premiums or co-investment in reduction initiatives.

Answered by Bethany Jones and Isobel Wild

Recommended reading:?Sustainability Data: Driving Engagement and Making Claims. State of Sustainability Podcast.

Next week: Use cases and SBTi acceptance of Green certificates vs Power Purchase Agreements (PPAs)

Policy Pulse: PACT and How it Improves PCF Data Exchange

Partnership for Carbon Transparency (PACT) was launched in 2020 with the mission to improve the accuracy of Scope 3 calculations. Scope 3 is fraught with issues of inconsistency and data access, so PACT is approaching this by setting a unifying standard for calculating and exchanging carbon footprints.

Since the bulk of company emissions typically sits in Scope 3 with upstream suppliers, PACT is focussing on Product Carbon Footprints (PCFs) to better understand emissions from purchases. They are doing this with 3 major developments:

• A global methodology for calculating consistent PCFs across industries.
• The technical infrastructure to enable PCF data exchange between suppliers and software.
• An ecosystem of actors across business, tech, consultancies and NGOs to help drive the change forward.

This initiative has developed at pace over the past year, with around 1000 organisations involved and over 1,400 PCFs exchanged.

What does PACT actually mean for business?

Fellow travellers in the corporate sustainability world may be thinking - “not another acronym”, “Do we need another standard?”. Well here’s why this standard is new and exciting.

PACT essentially enables the exchange of granular and verified primary data available across the value chain. It moves businesses from ???→ ??:

???Limited insights into Scope 3 emissions, restricted by the availability of activity data and relevant emission factors → ??Supplier-specific primary emissions data collected, calculated and shared at every step of a product's components' lifecycle.

???Fragmented and time-intensive supplier data requests, where they complete multiple forms for multiple customers → ??Standardised calculation methodology and data exchange framework, so companies can repeatedly share data with any customers, suppliers or partners.

???Lack of comparable, trustworthy primary PCF data, using inconsistent standards and unvalidated inputs → ??Guidelines to ensure comparable and consistent calculations, resulting in accurate, high-quality data.

???Inability to access and exchange data across different systems and complex value chains → ??Open data exchange system that offers security and interoperability, to enable data exchange across global organisations and complex value chains.

What to expect going forward?

This is voluntary at the moment. However, it is gaining great momentum in the industry with partners like Unilever, Nestlé and Colgate starting to request PACT conformant data from suppliers. So for businesses looking to get involved, the best thing is to just get started with PACT. In particular, to start:

• Calculating PCFs using the PACT methodology
• Requesting PACT conformant PCFs from your suppliers
• Using high-quality PACT PCFs in Scope 3 calculations

Other News

• ??Water Cuts & Conflict (Excelsior):?Mexico to receive $65 million to reduce its US water consumption, as water shortages and drought hit southwestern US. This latest agreement marks “the third consecutive year of water cuts from the Colorado River to Mexico”. Texan congress members have also pushed for the US to “suspend aid to Mexico…until Mexico pays off its current water debt”.
• ???Protests in Peril (Guardian): Five UK climate activists from Just Stop Oil received record-length jail sentences (up to 5 years) for a plan to block London’s M25 motorway. The right to peaceful protest in Australia is also “in peril”, the?Guardian?reported.
• ???Labour’s Environmental Priorities (Steve Reed, X): The new minister for the Department for Environment, Food and Rural Affairs (Defra), Steve Reed, sets out his five priorities in a?video posted to Twitter. These are: cleaning up British rivers, lakes and seas; moving Britain to a zero-waste economy; supporting farmers to boost Britain’s food security; ensuring nature’s recovery; and protecting communities from flooding. Good news: labour removed the ban on the onshore wind (on day one). Bad news: a budget for farming is notably absent from the Labour Manifesto.
• ???Lab-grown pet food meat (BBC). The UK has become the first European country to approve putting lab-grown meat in pet food. Lab-grown meat is a conflicted topic, with advocates pointing to the environmental and animal welfare benefits, while critics say it is expensive and could negatively impact farmers.

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