According to Capgemini research, the CPG and retail industries exemplify some of the most common issues when it comes to turning net-zero goals into measurable action.
According to a 2023 Net Zero Tracker
report, less than 5
percent of a group of companies that have publicly stated net-zero
goals
are actually on track to meet them.
In reality, that 5 percent metric is probably optimistic. A 2022 Capgemini
report
noted that less than half of a group of executives surveyed had clearly defined,
short-term sustainability initiatives.
“The difficulty we’re starting to see emerge is the actuation toward net-zero
goals,” Alex Tepper, Global Head of
Ventures at creative consultancy frog — part of
Capgemini
Invent
— told Sustainable Brands®.
The CPG and retail industries, specifically, have set out on some lofty goals —
typically in alignment with one of several accepted international standards —
but these two industries also share the burden of major common
emissions-production issues such as freight and raw-material
needs.
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An upcoming session at SB’23 San
Diego
entitled Exploring Sustainable Consortiums: How to move from targets to
tangible
results
will examine some of the most pressing gaps in net-zero goal-setting with two
leaders in the space: Tepper and Kate
Aydin, EVP of consumer products &
fashion at Capgemini.
Curbing costs remains a big hurdle
“All of these net-zero goals require investment from the companies who set them.
However, there’s often pass-along costs that drive up prices for the end product
for the consumer,” Aydin says. “It’s a tough journey.”
Although partially a perception issue, it’s common knowledge that committing to
the type of evolved corporate action required to get closer to net-zero goals
requires upfront cost (but could actually be cheaper in the long run). Aydin
notes that it can be tough to garner the investment because companies and
entities are like “big ships,” in that it’s hard to make big turns and changes
easily.
“The shift in thinking needs to happen in balance with profit and purpose,” she
says, “with help from employees, supply chain practices, vendors and ingredient
suppliers.”
Making it work across company functions
Tepper says that frog sees a lot of siloed data across companies that ultimately
slows down the ability to create and work towards net-zero goals.
“It takes collaboration between the financial side and the emissions side,” he
adds.
Another obstacle is that each company has a different way of facilitating the
teams responsible for sustainability-related work. Another 2022 Capgemini
report
found only 13 percent of organizations have set up a governing body or steering
committee to oversee a data strategy and progress on the net-zero journey. Some
organizations may have a full team dedicated to tracking emissions, supply chain
and the like; while others may only have one or two people managing the entire
cause.
“We see the most progress where the groups have real ability to get things
done,” Aydin says.
While collaboration between the sustainability functions and other groups is
crucial, it’s also important to connect these successes up to the C-suite —
where Aydin says those leaders want to show success and create that link that
can help net-zero goals get on the broader radar.
Transparency is essential
“If you know something, you have to put it out
there,”
Aydin says. “It will buy respect from consumers.”
Especially in consumer-facing industries such as CPG and retail, transparency in
reporting towards net-zero goals can go a long way in reputation-building and
moving the needle on adjacent sustainability initiatives. Although Tepper admits
that some companies see reporting a shortfall as a “disincentive,” he adds that
companies that are openly sharing data around net-zero goals are the ones that
are further ahead in this journey.
There’s also the caveat of upcoming regulations in the European
Union
and
US
that’s going to require companies to adhere to some level of reporting towards
these types of goals. Companies that choose to buy into this reporting now may
find themselves in a “proactive” versus “reactive” space when these new
governing rules go into effect over the next few years.
“We can reframe the risk with optimism. This reporting often leads to more
innovation and growth opportunities,” Tepper says.
Published Oct 13, 2023 2pm EDT / 11am PDT / 7pm BST / 8pm CEST
Geoff is a freelance journalist and copywriter focused on making the world a better place through compelling copy. He covers everything from apparel to travel while helping brands worldwide craft their messaging. In addition to Sustainable Brands, he's currently a contributor at Penta, AskMen.com, Field Mag and many others. You can check out more of his work at geoffnudelman.com.
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