Pay, VCMI, Inflation, Plastics, Vitality

1. The?bare?minimum?

Many local supermarkets have collection points for food bank donations. But increasingly,?supermarkets’ own workers?are resorting to food banks to feed their families.

This week, Sainsbury’s?revealed?that its Chief Executive received a pay packet worth ￡3.8M: nearly three times what he earnt in 2021. Tesco’s CEO?received ￡4.7M last year, whilst M&S’s CEO received a?￡1.6M bonus.

But whilst their bosses take home million pound pay cheques,?research?in December 2021 found that over 40% of supermarket workers earn wages too low to cover basic living costs. Earlier this year, Sainsbury’s raised its employee hourly pay above living wage standards. But it hasn’t raised the pay of crucial workers including cleaners and security guards, who are hired through third-party contractors. In fact, no major UK supermarket is an?accredited living wage employer?– meaning it commits to pay both its direct employees and its contractors enough to live on.?

Image matters. A Chief Executive taking home ￡4M whilst his cleaners are forced to use food banks looks bad at the best of times – even more so when many of these workers put themselves and their families at risk to keep food supply chains running during the pandemic. And,?as we’ve written before, for any company claiming to be ‘sustainable’ or ‘progressive’, it looks even worse.

But this is about more than that, too. The living wage is not a ‘nice to have’. It’s the bare minimum required for someone to feed themselves and their families, to pay the rent, to heat their home. It’s the amount required to survive.?

It’s easy to assume businesses, especially those who talk about sustainability issues, have bought into ‘stakeholder capitalism’. But when a business model means workers must skip meals to stop their children going hungry – and the profits made from paying workers poverty-level wages end up in CEOs’ pockets – it’s clear that something doesn’t add up.

2.?Standardising?the standards

The concept of net zero has quickly gained traction among corporates and governments alike. But the concept presents challenges when applied to individual organisations and, as with any new concept, it takes a bit of time to define.

The latest attempt to define net zero for business is the?Voluntary Carbon Markets Integrity?(VCMI) initiative, which launched its?trial code?for assessing the credibility of corporate net zero claims last week. You’d be forgiven for feeling a sense of déjà vu: the Science Based Targets initiative (SBTi) launched its own?Net-Zero Standard?last year to provide a framework and validation for businesses looking to set net zero targets.

But where the SBTi set a high standard for when businesses can claim to be net zero – when they have reduced emissions by 90% and offset the remainder – this left open the question of how businesses can invest in voluntary carbon markets and get credit for this necessary investment in the meantime. The VCMI, developed by a group including BEIS and the Children’s Investments Fund Foundation, intends to resolve this challenge by creating a standard with a gold, silver and bronze level for corporate net zero targets according to their progress towards emissions reduction targets and quantity of offsetting.

This gives more texture to assessing net zero commitments, where the SBTi’s single, high-quality standard gives less credit to companies going further with offsetting. However, this also must be balanced with the risk of overwhelming the space with too many certifications, standards and initiatives.

Without requiring science-based targets to be validated by the SBTi or “high-quality offsets” to meet any specific standards, the VCMI risks adding confusion without credibility. We will watch with interest as the VCMI tries to establish a meaningful role in the corporate climate commitments ecosystem.

3. Inflated targets?

This week,?record inflation?levels have been front-page news. But what does this mean for sustainability?

Recent surveys suggest?shoppers may be abandoning sustainable habits in response to price increases caused by inflation. This has led some to caution that?inflation may damage sustainability goals. However, consumer habits are just part of the sustainability puzzle. Assuming customers alone bear the responsibility for improving sustainability underplays the importance of building sustainability into the fabric of business for lasting improvements. Additionally, while consumers are struggling with price increases, they still desire sustainable goods and services.

Concerns that inflation will stall progress towards net zero spring from an overly narrow understanding of sustainability as focused on products, rather than as an approach to business as a whole. Furthermore, this discussion is overshadowed by the persistent, yet misguided, notion that sustainable business is more expensive than business as usual (or indeed even a ‘luxury’). In fact, ensuring that sustainability is at the heart of company strategy can help businesses overcome a myriad of challenges.

More importantly, sustainable business solutions do not always lead to higher costs – often, they help businesses save money. For example, given that inflation is being partially driven by energy prices, business decisions like switching to?renewable energy sources?can help companies simultaneously reduce energy costs?and?reduce their carbon footprint. And sustainable business models – think about the rising trend towards “rent don’t buy” from IKEA and others – can help customers save money too.

Companies need to get creative, developing new business models to ensure they maintain momentum on carbon reduction and other sustainability targets without passing extra costs onto consumers.

4. Its not easy to stop being single

Scotland has stormed ahead of the rest of the UK by recently?banning single use plastics. Whilst this is essential to reducing the enormous environmental challenge presented by plastic waste, it is not the silver bullet to addressing climate change that some may think.

When Scottish businesses were asked what they planned to use instead of single use plastics, most chose single use fibre-based containers. These are usually made of bagasse which is a biodegradable by-product of sugar cane. A life cycle analysis shows that the carbon impact of bagasse single use containers was almost the same as those made from polystyrene. This is because bagasse is heavier and denser, leading to higher emissions from transport and disposal.

As a result, this is a ban on a specific product resulting in a swap of one single use item for another, addressing a waste problem but with almost no carbon savings. This is true of other products we tend to assume are more eco-friendly; to make up for the resources that went into making a cotton tote bag it must be used 7,100 times, and a reusable coffee cup up to 250 times.

We need a more fundamental transformation if we are going to address our throwaway culture. What would a different policy approach that encourages re-use look like??Netherlands?and?Sweden?have demonstrated how setting statutory country-level consumption-based targets allows for more informed and whole system decision making. With a?consultation?on a Circular Economy Bill launching in Scotland, there is the chance to throwaway its single life.

5.?Get rewarded for doing?nothing?

No one enjoys shopping for car insurance – it’s expensive, its complicated, and after a few years of staying at home, some must have wondered, “is it even worth it?”. But as we don’t have a choice if we have a car, this week on the goods we’re highlighting a new option that we love.

VitalityCar?is designed in the same way as the?Vitality health programme. For those who are unfamiliar with it, the programme uses behaviour change science to incentivise members to lead healthier lifestyles. The healthier members are, the more rewards they benefit from. The logic behind these benefits and rewards is the Shared Value model: the healthier you are, the better for Vitality (fewer claims), and the better for society (healthier people).

VitalityCar takes this one step further: not only do you earn points if you drive safely – which tends to mean using less fuel and hence fewer carbon emissions - you accrue points even if you don’t drive at all! Again, if you don’t drive, there is no risk of having an accident (good for Vitality and society) and fewer emissions in the air (good for society).

So if you need to renew your car insurance soon, why not head over to Vitality to see what sorts of?rewards and benefits?you could receive?

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