Food firms address sustainability, but need to pick up the pace, report says
A new report measuring corporate progress toward sustainability found that almost two-thirds of more than 600 of the largest U.S. public companies have committed to reducing greenhouse gas emissions, more than half have formal policies to manage water resources, and close to half have policies to protect workers' rights. The analysis included 21 companies in the food and beverage industry.
The report by Ceres, a Boston-based nonprofit, also noted that an increasing number of firms are disclosing climate change risk in their financial reports. However, the language isn't clear enough to aid in investment decisions, according to Market Watch.
Ceres works with investors and companies to develop solutions to sustainability challenges such as climate change, water scarcity, water pollution and human rights abuses. Its full report, "Turning Point: Corporate Progress on the Ceres Roadmap for Sustainability," is posted online, as is a 19-page executive summary. The organization said that a deeper analysis of the performance of 24 industry sectors, including food and beverage, will come out in April.
Consumers are increasingly voting with their wallets when it comes to food and beverage company pledges to take action on climate change by enhancing sustainability and adopting more environmentally sound practices.
Shoppers also want to know that the companies they patronize reflect their values by embracing environmental sustainability and ethical treatment of workers and animals. Firms have something tangible to gain in this process. According to Label Insight, manufacturers that adopt "complete transparency" are rewarded with consumer loyalty of about 94%.
In its report, Ceres noted that a number of food and beverage firms had gone the extra mile to reach stated sustainability leadership goals in the areas of governance, disclosure, stakeholder engagement, and environmental and social performance. General Mills was positively ranked for board engagement on global responsibility, Hershey scored high on investor engagement and disclosure standards, and Kraft Heinz hit the top tier on water management and employee diversity, among other elements.
A few other food and beverage companies had room to improve, according to the report. Monster Beverage received low marks for its procurement practices and human rights policies, Ingredion was dinged on management accountability, and Mondelez was ranked on the low end for transportation management and modes.
While food and beverage companies and the other sectors analyzed in the report are gradually moving toward sustainability policies and enhanced supplier expectations, they aren't doing it fast enough or boldly enough to make the changes that need to be made, Kristen Lang, Ceres' company network director, told Market Watch.
Meanwhile, more companies are making pledges to recycle materials, reduce carbon footprints and source sustainable ingredients in order to respond to public sentiment and potentially cut costs. Coca-Cola announced last month that it plans to collect and recycle by 2030 the equivalent of all of the global packaging it sells. PepsiCo made a pledge in 2016 to make all of its packaging recoverable or recyclable by 2025. Mars, Unilever and Walmart have also made commitments to make their operations more sustainable.
These are likely more than just feel-good moves pandering to consumer demands. Companies also stand to save money and make some by adopting these changes. According to Nielsen, 66% of all consumers are willing to pay more for sustainable brands, while 73% of millennials and 72% of Generation Z consumers feel that way.