Greenwashing wouldn’t be enough today

This article is available for reading in Trade magazin 2024/8-9

Transparency is step zero

More than 73% of consumers are willing to change their consumption habits to reduce harmful environmental impacts, according to the Nielsen Global Consumer Trends Report 2023. Meanwhile it has also become clear: in most consumer goods categories, more than 80% of greenhouse gas emissions aren’t generated by in-house operations but in supply chains. Many questions arise about what exactly is happening in the supply chain, but in the developed world unfortunately only one fifth of FMCG companies have a transparent view of their supplier processes.

More than 73% of shoppers are willing to change their consumption habits in order to reduce environmental impacts, according to an international survey

Blockchain and AI

Sustainability was one of the main themes of the FMCG Connect 2024 event, which took place in India this April. Several presentations were focusing on the evolution of blockchain technology. Back in 2018 Walmart partnered with IBM to bring transparency to their supply chain through blockchain, while Coca-Cola has been monitoring and optimising resource use with the help of this technology since 2019. Nestlé also plays a pioneering role in this field: from raw material sourcing to production and distribution, every stage of the supply chain is recorded, giving all participants access to real-time, accurate data any by this minimising the risk of errors and discrepancies. AI-based developments can also make a major contribution – not only to improving supply chain transparency, but also to optimising resource use and waste reduction.

IoT: smart refrigerators and vending machines

In the FMCG industry the Internet of Things (IoT) offers a number of benefits that can significantly improve not only supply chain efficiency, but also product management and customer relationships. Coca-Cola is using smart vending machines and refrigerators with IoT connectivity to collect data on consumer preferences and stock levels, which is then used for inventory management and for marketing purposes. Unilever is also actively utilising IoT solutions in its supply chain, such as smart sensors for optimising production processes and reducing energy consumption.

Innovation for less packaging waste

According to a study by the U.S. Geological Survey (USGS), from the 6.3 billion tonnes of plastic generated since mass production began, 4.9 billion tonnes have unfortunately ended up in landfills or in nature. Studies claim that by 2050 there could be more plastic in our oceans than fish – it is obvious that the main problem is single-use plastic packaging. Consumers are demanding sustainable packaging solutions: the use of recycled or biodegradable materials, compostable options and minimalist packaging designs. In the beauty industry only 14% of packaging goes to a recycling plant and only 9% is actually recycled. PwC’s Global Consumer Insights Survey has revealed that 79% of consumers are more loyal to brands committed to environmental and social issues.

The Consumer Goods Forum, whose members include giants such as Walmart, Tesco and L’Oréal, has pledged to achieve zero net deforestation by 2025

No sustainability without complex ESG

A recent survey by EY (with responses from executives at more than 500 Fortune 1,000 companies) reveals that 82% of managers confirmed: their organisations have carbon reduction initiatives in place and set targets to achieve net zero emissions by a given year within 10 years. At the same time true sustainability can only be achieved if the full spectrum of environmental, social and governance (ESG) considerations is taken into account – this is a statement that 87% of CEOs agree with. While 78% say that curbing CO2 emissions, increasing resource efficiency and developing an ethical supply chain are the most important, three quarters of respondents believe that social responsibility is just as important a sustainability issue. 92% agree with the statement: without ESG, sustainability efforts would often remain superficial, ineffective measures. //

Energy efficiency and renewables in the food industry

Gábor Majoross
general manager
Enertech Hungária

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