Marketing & Communications Organizational Governance

The Secret to Decreasing Scope 3 Emissions:
A Win For R&D, Marketing and Sustainability Teams

The First Educator Advantage (FEA) is when a CPG brand is first to educate consumers on an impact topic that does not yet hold mainstream materiality. Here, we explore how successfully executing this strategy can reduce scope 3 emissions, increase consumer loyalty and allow R&D teams to effectively innovate for the market.

Brand Provided | By Christina Lampert | Published 3 years ago | About a 5 minute read

Image: Beyond Meat was one of the first US CPG brands to educate consumers on the impacts of their dietary choices | Beyond Meat

Sustainable packaging has undoubtedly accrued greater materiality in the last few years — as evidenced by review of the latest Consumer Packaged Goods (CPG) materiality assessments. McKinsey even reports that half of US consumers are highly concerned of the environmental impact of packaging.

Food CPGs such as PepsiCo and Unilever have invertedly responded by announcing formal sustainable packaging goals. The Consumer Brands Association reports that most of these goals include reaching 100 percent recyclable or compostable packaging by 2025.

There are two ironies here that must be addressed.

US recycling and composting rates are low

According to the EPA’s most recent calculations (2018), only 32.1 percent of Municipal Solid Waste was recycled or composted in the United States. In fact, 0.01 percent of US cities currently offer curbside composting with fragmented pockets of backyard practice.

End-of-life impact is relatively small

Greenhouse gas (GHG) CO2e emissions from the production of packaging materials and end-of-life disposal are relatively small when considering the entire food product’s lifecycle. Most consumers would be surprised to learn that the majority of GHG impact for a typical food product is actually derived from land use change and on-farm processes.

This can be deduced from numerous food CPG GHG inventories and life cycle assessments. It is also demonstrated in Hershey’s latest sustainability report, below.

Source: The Hershey Company. 2020 Sustainability Report (p. 46).

This poses a nuanced conundrum for food CPGs

Does the CPG invest capital toward sustainable packaging, which tackles a relatively small portion of GHG impact yet wins the heart of the consumer? Or does the company allocate that same capital to reduce upstream scope 3 emissions with regenerative sourcing and ingredient decisions, shrinking presumably the most significant source GHG emissions?

These questions can naturally cause tension amongst sustainability, marketing and R&D teams. There is no doubt that choosing to prioritize consumer materiality is effective for the short term. However, there is a key opportunity that’s often overlooked when considering for the long term.

The First Educator Advantage

The First Educator Advantage (FEA) is when a CPG takes the initiative to be the first to educate consumers on an impact topic that does not yet hold mainstream materiality. One noteworthy successor of this strategy is Beyond Meat.

In 2018, Beyond Meat published a peer-reviewed life cycle assessment that compared the environmental impacts of plant-based protein and animal-based protein. The company strategically communicated the results to consumers across its marketing channels in a simple and effective manner. Many of these consumers were hearing about the following environmental impact topics for the first time as they related to their dietary choices.

Source: Instagram (@BeyondMeat) post on February 10 ,2021

A 2020 Gallup poll found that close to one in four US consumers has reportedly made a conscious effort to cut down on meat. The environment was among top reasons for this behavior change. Furthermore, plant-based meat sales grew by 45 percent compared to 2019. It can be inferred that this behavior and lift in sales was a direct cause of first-educator efforts and skyrocketing popularity of plant-based meat brands such as Beyond Meat and its rival, Impossible Burger.

Successful FEA execution raises the consumer’s level of consciousness. This naturally results in the subconscious questioning of competitive offerings that are not communicating on the same impact topic.

A high-level summary of how to execute the FEA strategy within any CPG

Step 1

Sustainability teams should work closely with R&D to assess the farm-to-gate greenhouse gas impact (perhaps in the form of an emissions factor) for their current ingredients. These emission factors should be multiplied with purchase volume to identify key opportunities for ingredient and sourcing locations swaps that are less carbon intensive.

Step 2

Next, these teams should search and select less carbon-intensive ingredients and sourcing locations with procurement. These can be found using an ingredient sustainability database such as HowGood. Once these swaps are aligned upon, teams should perform a cost-benefit analysis that includes consumer sentiment with the newfound environmental benefits.

Step 3

As these swaps are integrated into the supply chain, marketing teams should also be briefed on their environmental benefits. Marketing can then begin to plan an effective communication strategy surrounding the changes to consumers at large. Perhaps they focus on one unique ingredient or sourcing change for each innovated SKU. It’s recommended that these teams perform qualitative surveys amongst average consumers to gain a baseline of what’s currently understood on this impact topic. They can then marry surfaced insights against environmental purchase-intent behaviors to develop a unique value proposition.

A win for all

When executed properly, this strategy enables success for multiple teams. Sustainability teams can hit their scope 3 GHG emissions-reduction targets faster. Products designed by R&D teams are uniquely positioned amongst competitors. Marketing teams experience a boost in consumer acquisition, consumer retention and perhaps incremental shopper opportunities with impact-driven retailers.

The FEA should be leveraged by any CPG willing to take innovative strides to ensure strong long-term performance.