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For Companies with Authentic Sustainability Pursuits, the Devil’s in the Details

Several discussions at SB’23 San Diego highlighted the importance of achieving total visibility into company operations, relationships, impacts and messaging — to avoid surprises that could hamstring progress.

A holistic sustainability strategy: Aligning brand finance with sustainability goals

Image credit: Christine Roy

As this thought-provoking Tuesday afternoon breakout made clear, even the most sustainability-dedicated brands could unknowingly be canceling out their own efforts to reduce emissions because of their banking and advertising relationships.

Pure Strategies co-founder and Managing Director Tim Greiner led a discussion with Duncan Meisel, Executive Director at Clean Creatives; Paul Moinester, founder and Executive Director at The Outdoor Policy Outfit (TOPO); Kate Ogden, Head of Advocacy and Movement Building at Seventh Generation; and Katrina Shum, Head of Regeneration & Sustainability at Lush Fresh Handmade Cosmetics, on strategies to maximize brand impact beyond traditional metrics.

An important step for brands is to see which advertising and PR agencies you are partnering with. Advertising and PR are behind the fossil fuel industry’s misleading ads that convince people that climate change isn’t real; and brands have the power to shut off the tap of disinformation. Despite what some fossil fuel companies claim about their sustainability efforts, they are still publicly committing to making more fossil fuels — which continue to drive climate change and are responsible for more deaths than tobacco. Clean Creatives is a global movement to get the PR and advertising industry to stop working with fossil fuel companies; and over 2,000 creatives and 800 agencies have signed the pledge to not work with them anymore. The growing number of brands — including Seventh Generation and Lush — that are pushing their agencies to cut ties with the fossil fuel industry is a powerful lever. Beginning with a simple conversation and making it clear that your brand won’t work with or hire agencies if they are supporting the fossil fuel industry can have a big impact on stopping the growth of dangerous disinformation.

The Power of Climate Labeling: Key Learnings from the SB/How Good Partnership

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“More is more,” Meisel said. “And every conversation about this issue is progress.”

Brands not only need to consider where their marketing budgets are going, but also where they hold their finances. Banking plays a major role in driving climate change — and where you bank matters, especially as companies grow. Approximately 22 percent of the money in your personal or your company's bank account is being lent out to the fossil fuel industry — which continues to promote deforestation and emit climate-changing gases — and other sectors responsible for fueling climate change. When brands make commitments around their own environmental impacts, they need to consider that the emissions funded by the financial institutions that they work with could actually be higher than their own Scope 1 and 2 emissions, combined.

“The climate work and objectives of the largest companies in the world are being entirely undermined by their reliance on misaligned financial institutions that are funding things that these companies would never support themselves,” Moinester said.

To put it into perspective, if you were to buy an electric vehicle, you would reduce your emissions by approximately 3.3 tons per year; but if you were to move $25,000 from a “dirty” bank to a “green” bank, you would have a reduction of 1.4 times the emissions of buying an EV.

Organizations such as “think and do tank” TOPO partner with brands to help them take back the power of their dollars and ramp up investments in the things they actually want to support. The first step is working with your company’s CFO to set up targets and goals that align with your brand's commitments; then engage with your banks and investment companies just as you would a supplier on your supply chain. In the case of the Seventh Generation, it was looking at the company holistically to see if it was still achieving what it had initially set out to do — which led to the creation in 2022 of a first-of-its-kind framework with which companies can factor in their spending to comprehensively measure their corporate climate impact.

“We realized that we were complicit in propping up the fossil fuel industry across any number of areas of our business,” Ogden said. “Every dollar we spend and invest in our business has quiet ties to driving climate impact because of the relationship of those business operations to the fossil fuel industry.”

Brands need to look at all aspects of their business — including banking, insurance, 401ks, marketing services, philanthropic efforts and advocacy — to understand the associated climate impacts and set a strategy to address these emissions.

While that may seem like a daunting task, it doesn’t have to be. Start small and prioritize where to start — for example, with marketing services or retirement savings — and then work with those organizations to create a timeline to resolve the issues. In the case of Seventh Generation, they made a survey based on the Clean Creatives Pledge, sent it around to their vendors and marketing agencies, and created an engagement map.

Lush, on the other hand, has historically used its shops as a platform to fight fossil fuels through various campaigns — started with the company’s retirement savings plan when it was time to renew the RFP. Working with Canadian credit union Desjardins, it created a retirement savings fund called the Lush Fund that adheres to certain ESG requirements, including not investing in tar sands. That grew to the US market, where they began looking at their ethical funds and charitable giving and moving them over to better banks.

“Internally, we have been slowly moving pieces of the pie over,” Shum said, “while externally, we have been joining on conversations on how to end fossil fuels and engaging with other businesses on how we grow this movement.”

Brands’ choices in who they partner with for their marketing and finance activities play an overlooked but critical role in the fight against climate change. By starting the conversation and demanding solutions in a timely manner, companies can wield a substantial influence in reducing emissions and countering disinformation campaigns perpetuated by the fossil fuel industry. In this growing movement, brands can be a powerful agent of change.

Making sustainability claims is about to get harder; so, stop greenwashing and start verifying

L-R: Beth Wyke, Suzanne Shelton and Mark Lee

The wild, wild West days of sustainability communications are coming to an end. From mandatory disclosures stemming from the EU’s Corporate Sustainability Reporting Directive to guard rails on product claims coming from the FTC’s Green Guides update, brands are under increasing pressure to ensure their messaging is both accurate and impactful.

Mark Lee, Director of the SustainAbility Institute by ERM, introduced two very different panelists for this session that explored greenwashing pitfalls and the role of verification in improving sustainability communications. Suzanne Shelton, President and CEO of Shelton Group and Senior Partner at ERM, has built a career helping brands to shout loudly about their ESG progress. Beth Wyke — Partner and Business Lead for Corporate Assurance at ERM CVS — on the other hand, has spent her time quietly and diligently finding evidence to back up ESG claims.

As Lee toured the microphone around the room, numerous delegates voiced their current challenges and concerns. Incoming regulation and tightening of the rules when it comes to making environmental claims on product packaging is front of mind for many auditors and communicators.

“45 percent of US citizens want to be seen to be buying eco products — up from 33 percent ten years ago,” Shelton said. Most look for either recycling logos or certification badges to make them feel better about what they consumer, she added. “The trouble is, people don’t really know what these logos mean. Certifications build trust with people, but there is a real lack of understanding and recognition about what they mean.”

In the first of many examples of greenwashing shown on screen, Shelton highlighted a plastic bag that claims to be reusable (mainly because it is made of heavier plastic, making it more durable) and recyclable (albeit with a recyclable No. 4 LDPE logo, which means the bag would have to be taken back to a store to enter an appropriate recycling stream). “And then there are the companies that make up their own labels. Brands are misleading consumers; and there’s not a lot of regulation to control it, but it is coming.”

In most instances, companies are following the rules and are staying within the boundaries of what is legal when it comes to making sustainability claims, Wyke claimed. Yet she is frustrated by the evidence of brands bending the rules, greenwashing and generally misleading people.

“I’m skeptical by nature. That’s why I’m an auditor,” she said. “And companies need to use caution when they make claims or use certification logos.” She used the example of a range of sandwich bags that she said have been wrongly marketed as being compostable. “Consumers can only compost them after use in some parts of the country, but not everywhere. Yes, the company is complying with the rules — they can be composted or taken back to the store for recycling. But it’s definitely misleading; and due to the new awareness of consumers and expectations on companies, there is a reputational risk for brands, even if there isn’t a legal risk.”

The FTC Green Guides will soon be revised and there is a wide acknowledgement that the legal rules on environmental claims need to change. In the meantime, Shelton says that brands just need to be open about the journey they are on.

“Slapping the word ‘green’ on something, without explaining it, is greenwashing,” she told the audience. If you’re a brand that is frustrated by the idea that packaging that can be composted is not able to be composted in most parts of the country, start a movement to affect change, she added. “Let’s use the space on the back of packaging to explain the situation and invite activism to bridge the gap. Let’s open up a conversation.”

Unlocking ESG metrics: From data to actionable impact

Image credit: IBM

This Wednesday afternoon breakout explored the challenges and opportunities of operationalizing sustainability in global agricultural supply chains through data and technology.

Janet Wall, Product Strategy Leader at IBM Sustainability Solutions, spoke about the importance of making ESG data visible and actionable. She emphasized the need for a data platform that can integrate data from disparate sources and make it accessible to all stakeholders. This allows for more informed decision-making and real-time responses on sustainability.

Antoinette Marie, Director of Heifer Labs at Heifer International, also expounded on the value real-time data — specifically, with regard to supporting farmers in Malawi. Heifer International is working with IBM to provide farmers with SMS warnings on weather triggers, which is helping farmers to make more informed decisions about planting and harvesting, which is leading to increased yields and incomes.

The speakers discussed the importance of cross-functional collaboration in ESG initiatives. They noted that procurement, IT, operations and other departments all have a role to play in collecting, analyzing and reporting on ESG data. By working together, these departments can create a more comprehensive and accurate picture of their company's sustainability performance and areas that need attention.

Giving stakeholders product-level insight through carbon labels

Image credit: Allbirds

The increasing proliferation of product carbon labels is giving consumers, investors and other stakeholders insight into the carbon impact of their favorite products and allowing brands to capture high-quality data for measurement and reporting. Moderated by Ren DeCherney, Lead of Built Environment, North America + Australasia, at the Cradle to Cradle Product Innovation Institute, this Wednesday afternoon discussion gave Oatly Director of Sustainability Julie Kunen, Allbirds Sustainability Senior Manager Aileen Lerch, and Logitech Head of Engineering for Materials, Sustainability and Gaming Audio Tiffany Beers the platform to discuss the methodologies and processes their brands have put behind their product-level carbon labels in order to ensure high-quality, accurate, verifiable data.

To collect data, a brand needs to know who to involve and how to involve them. Whether it be a team dedicated to leading the charge like Oatly or having individual teams manage their own data like Logitech, data collection requires a group effort. An added benefit of doing so, illustrated by Allbirds, is that it allows for the sustainability team to be invited and involved in different areas of operations and understand their challenges on a personal level.

“Getting data requires a lot of collaboration and dependency across a lot of teams, which can be challenging,” Lerch said. “But it has enabled our sustainability team to be embedded in the decision-making of the company.”

But that cross-team and often cross-industry collaboration is key. For carbon labeling, every stop along the production process must be accounted for; so, bringing in people from up and down the supply chain to calculate their data is no small feat. Thinking about who to partner and collaborate with can never start too early for a more efficient and accepted process. For brands such as Allbirds, it could mean competing with external partners such as adidas to see who can make the lowest-carbon shoe.

In the case of Logitech, getting the teams on board meant convincing everyone to play a role. “A lot of it is internal storytelling,” Beers said. “At the beginning of the product, getting everyone involved in setting a goal allows the freedom of ideas to come up; and it bonds the teams because they are doing something bigger.”

Further cultivating that excitement and empowering teams to actively take part in the process involves understanding that sustainability means different things for different people. For some, it could be carbon; for others, it could be human rights — but deciding what sustainability means to your brand will give you consistency in your data collection. To get that level of focus, educating your teams on what sustainability means to the company is key. The sustainability team at Oatly hosts monthly internal sustainability classes geared towards non-specialists; and by doing so, everyone across departments can now speak to the company's sustainability agenda.

“We have invested a lot of time in trying to open the door to what we do, so it’s not so mysterious,” Kunen said. “They feel a lot more confident and have enough sustainability knowledge to engage in this topic and be an actor in this journey.”

While the journey is to inevitably create a carbon label, it's also a jumping-off point for a broader plan that can improve a company’s narrative around its sustainability initiatives and the processes of suppliers. Following the carbon along the supply chain allows a holistic view for the brand to see risks in the supply chain and begin to think about how to tackle them — whether it be an updated supplier code of conduct to see how a supplier is using water or updating the metrics around agriculture and farming.

“Carbon gives an entryway,” Lerch said. “For us, it is having that focus and trying to make an impact in one area but not losing sight of other indicators.”

The panelists agreed that a collaborative approach to data collection — involving cross-functional teams and partners throughout the supply chain — ensures high-quality, accurate and verifiable data. Knowing what sustainability means for your brand and educating teams on this concept helps maintain consistency in data collection and empowers individuals from various departments to actively participate in the sustainability journey. Beyond carbon labels, this approach serves as a foundational step in a broader sustainability strategy — enhancing a company's narrative and enabling a holistic view of supply chain risks for more effective mitigation strategies. Carbon labeling can serve as an entry point to making a positive impact while not losing sight of other critical sustainability indicators.