In the world of sustainable commerce, the age-old question of which came first, the chicken or the egg, persists. This question seems to nag and slow down adoption of sustainability best practices, as both the chicken and the egg try to decide who’s going to act first. Let me explain.
On the one hand you have retailers (the chickens in this story) that are being challenged by investors and stakeholders to push the envelope, become more environment, social and governance (ESG) conscious, and proactively raise the bar on becoming stewards of a cleaner and more harmonious planet that benefits all. On the other hand, you have consumers (the eggs) who have become savvy in their purchases. They are online information junkies with a penchant for the highest quality, fair-minded, eco- and social-friendly, and above all healthy products that they demand from the retailers. So, who is driving this sustainability bandwagon…the chicken or the egg? The answer is “both!”
Retailers Reign in Their Supply Chains
Recent news stories feature major retailers moving and shaking up their supply chains by broadening their certified sustainability offerings to drive their ESG stewardship goals and satisfy customer demand. Here are three examples announced just this week:
Amazon just announced the addition of four new carbon neutral certifications to its Climate Pledge Friendly program which launched last September. The four are CarbonNeutral certification by Natural Capital Partners, Carbon Neutral Certification from SCS Global Services, ClimateNeutral certification by Climate Partner and Carbon Trust Carbon Neutral Certification. Through its program, Amazon is not only showcasing its forward-thinking initiative to drive greater sustainable purchasing with its vast customer base, but it’s also using its leadership savvy to drive other companies in its supply chain to pick up the pace of their own sustainability best practices adoption, thus creating a much wider ecosystem of sustainability through the entire product lifecycle. Think about it: the sheer magnitude and scale of Amazon’s reach and impact can be a catalyst to significant reductions in CO2 emissions.
Walmart recently announced its decision to require all global fresh produce and floral suppliers to adopt Integrated Pest Management (IPM) practices verified by third-party certifications by 2025. Walmart teamed up with leading agricultural sustainability NGO, IPM Institute of North America, to help spearhead this initiative, which could help transform the growing practices of farms globally and encourage all fresh produce suppliers to reduce the use of pesticides, including chlorpyrifos and neonicotinoids, which are particularly dangerous to bee and other pollinator populations. Many of the certification programs included in the Walmart and IPM list include household names such as Bee Better Certified, Fair Trade International, SCS’ Sustainably Grown, Rainforest Alliance, and USDA Organic. These certifications and others in the program give greater credibility to Walmart’s corporate sustainability goals and help to establish a clear direction for other food retailers interested in driving sustainability practices that will meet customer and investor demands.
For its part, Target recently took the step of adding certified carbon negative foodware to its growing list of sustainable products. The plastic-free Restore foodware brand from Newlight Technologies Inc., recently went through a Lifecycle Assessment provided by SCS, which measured the carbon footprint of Restore straws and cutlery, finding them to be carbon negative. Restore replaces traditional plastic with a material called AirCarbon, which is a regenerative material made by microorganisms found in the ocean. Target becomes a trailblazer by becoming the first retailer to make the biodegradable yet dishwasher safe Restore products available to consumers.
Consumer Demand Puts the Heat on Retail
But enough about the chicken. The egg wants to be recognized and the egg is evolving. Consumerism is going through a transformation thanks to the COVID-19 pandemic. According to the most recent Ernst and Young Future Consumer Index, consumer trust in retailers and consumer packaged goods (CPG) brands has plummeted over the last year, with only 10% of US consumers trusting online and chain retailers. Additionally, only 13% trust CPG brands. Themes that now resonate more than ever with today’s consumers are corporate transparency and authenticity, along with safety (including food safety), environment/planet and corporate social practices. In fact, more than 30% of consumers now identify as “Planet or Society First” consumers. For retailers and brands alike, this is a huge wake up call.
For consumers, sustainability has become synonymous with trust. Companies like Amazon, Walmart and Target are taking tangible steps to empower sustainable purchases and secure the trust with ESG-minded consumers. The more transparent retailers make their supply chains, the safety and health of their products and the impact their companies have on the planet, the more accepting consumers will be, which in turn should reinforce consumer loyalty.
Around the globe, more than 80% of consumers surveyed said they are making more sustainable purchasing choices. In the UK, for instance, more than a third of Brits buy products from companies with strong environmental credentials. What’s more, 72% of consumers acknowledge that they pay attention to whether or not a business acts in a climate-friendly way. Globally, consumers have become fed up with greenwashing and sustainability buzzwords. With more time to investigate brands, and more brands being called out by the media for their greenwashing practices, today’s consumers are quick to leave one brand and go to another that is actively pursuing demonstrated and documented sustainability best practices.
How Certification Pushes the Egg to Deliver the Chicken, Which in Turn, Cracks the Egg
Sustainability certifications provide consumers with the validation they require to make educated and enlightened purchases that bond with their eco and social values. Such consumers can become strong brand advocates for life. They see the trusted certification marks on the brands they love, and they rely on those certification marks to authenticate the claim that the brands and retailers are promulgating.
Returning to our analogy, we find that the eggs (consumers) actually do read labels, and depending on their need, certification marks on the labels can drive purchases. As the chickens (retailers) increasingly require their supply chains to become certified to a wider variety of sustainability certifications available, they actually help solve the problem, by cracking open the hardened consumer shell and ushering in greater consumer acceptance, trust and loyalty…which in turn drives repeat business.