Data-Driven Sustainability Solutions for the Consumer Industry

The time to start your sustainability transformation is now

More than ever, sustainable companies are seeing accelerated business momentum:

Increasingly, consumers are consciously choosing sustainable and healthy products. We recently launched a consumer survey about health and sustainability in grocery shopping in 15 European countries, across more than 17,000 consumers. From this research we find that consumers are becoming more and more purpose-driven and action-oriented, with over 70% expressing willingness to pay at least 5% more for foods that are sustainably and locally sourced.

In parallel, sustainability reporting requirements are tightening and adhering to them early can provide first mover advantages. The EU’s new Corporate Sustainability Reporting Directive (CSRD) ensures that any subsidiary of an EU firm where at least 2 out of the 3 conditions (listed below) apply will need to publicly disclose the share of ‘green activities’ in their portfolio in a format that can be auditable and ‘machine readable’. Given the public nature of these reporting requirements, companies operating sustainably will likely have easier access to funding and public subsidies. 

  Sustainability disclosure is required for:

• Any company with more than 250 employees & publicly listed companies
  
•  Total balance sheet of 20M€
  
• Net revenue of 40M€
  

Beyond the regulatory requirements, many consumer businesses (e.g. grocery retailers, food brands, etc.) are setting ambitious sustainability targets. Those companies that are able to make their value chains more transparent and certify improvements will find differentiation opportunities and will be able to make a true positive impact along the dimensions people, planet and profit .

Your challenge to balance between planet, people and profit

Typically, sustainable business is presented as a balancing act between people, planet and profit. The reality is that these are not independent from one another. A solution that has positive effect on profit may have a detrimental effect on the planet. Conversely, an initiative to operate more sustainably may harm your bottom line. Most companies can’t do it all simultaneously. They need to make deliberate and informed choices on where to focus first. You have likely taken lots of steps toward hitting your internal sustainability targets. However, your customers and other stakeholders today also expect you to know what your suppliers, your suppliers’ suppliers, etc. are doing.

That is rightly so since your own activities typically only account for a fraction of the total environmental and societal impact of your products. In the case of meat products for example, approximately 90% of carbon emissions occur at the agricultural stages. So what more can you do, and where do you need to allocate resources to make a meaningful and lasting impact?

Winning with sustainability in the long-term requires an end-to-end play

A truly responsible business strives to drive sustainability across its end-to-end value chain. This requires a shift in mindset and a willingness to move away from traditional siloes and towards collaborative models to make lasting impact and target synergies.

It all starts with truly understanding your value chain and quantifying contributions made at each stage. Next, it’s about finding the optimal combination of solutions to make the highest E2E impact with the available resources across the whole value chain

Full end-to-end transparency requires harmonized tools and systems to facilitate collaboration and data sharing across value chain partners. To avoid that commercial interests impede collaboration, a clear governance structure is needed which promotes trust and ensures that there are mechanisms for fair distribution of costs and rewards. Lastly, there is a talent aspect that should not go unnoticed. New roles and organizational models with the freedom to experiment and the mandate to look beyond company boundaries are needed.

Data and analytics are the starting point

So how do you gain understanding of your value chain? The old adage of ‘you can’t improve what you don’t measure’ definitely rings true here. Too many companies rely on rather generic data metrics and industry benchmark averages. Sharing specific, measurable, accurate and reliable data between value chain partners provides the needed visibility on end-to-end sustainability. Analytics and visualization help to understand and communicate where improvements can be made.

Once you have the basic data foundation and mutual trust between value chain partners in place, the possibilities are endless. You and your partners can begin to collaborate to jointly identify solutions for improvement, but could also contemplate operating ‘as one’ by jointly developing strategies for bringing sustainable consumer products to market. How far you and your partners are able to take this, depends on where you stand in terms of your own journey of digital and sustainability transformation.

Realizing your competitive advantage

So let’s step out of the hypothetical and see what you can do today. A great example of an end-to-end value chain solution is our Sustainability Index, in which we calculate the environmental footprint of products across the entire supply chain. This includes indicators such as carbon emissions, water use, waste produced and distance travelled. Our data models are carefully designed in collaboration with Dutch universities. With this solution, there are three immediate competitive advantages that become available

1. You will not only be able to assess your own sustainability impact, but also that of your competitors, and will be able to see what you can do to surpass them.
2. Collaboration across your value chain gives insight into each stakeholders’ sustainability impact within the value chain, and extends your field of possibilities to make impactful changes
3. You can cater to your customers wishes to understand the environmental impact of each product they consume and company they purchase from

Want to know what this looks like in action? Take a look at some of the work we’ve done with one of the biggest food corporations in the world.

Want to know more?

Deloitte can help your organisation to make informed data-driven decisions, please contact us via the contact details below. We’re happy to engage and see how we can help you structure your vision, convince your stakeholders, analyze your data and build your solutions. First, last, small or big steps, we are excited to help you along the way!