The Green Illusion: The Truth about Sustainability Claims

by | August 18, 2023

Strolling down the grocery aisle, it’s hard to miss the fact that claims related to environmental, sustainability, and governance (ESG) themes are becoming more and more prominent in CPG packaging, especially for products based on ingredients with a history of problematic issues in the supply chain. Brands are increasingly finding themselves under pressure from multiple directions to tell a positive story about their commitment to eco-friendliness, ethical sourcing, and appropriate governance controls. But what sorts of efforts lay behind the catchy branding, and how confident can consumers be when evaluating sustainability claims? 

To understand the answers to these questions, TraceGains has created a report on the “State of ESG Compliance for the F&B Industry” based on a recent survey. Findings include insights to better understand how brands are thinking about ESG topics and the challenges they’re encountering in pursuing their green goals. Survey respondents indicated that while there’s strong commitment to building a sustainable supply chain for the food and beverage industry, many hurdles still stand in the way, and there may well be reason for concern regarding the accuracy of sustainability claims being made by brands. 

Deciphering ESG claims and labels

Graph showing industry confusion around the labeling of sustainable foods.

As you stroll down grocery store aisles, eye-catching labels boasting “eco-friendly,” “sustainable,” and “green” compete for consumer attention. According to the survey, almost 50% of decision-makers within the F&B industry cite either consumer demand or competitive pressures as their primary motivation for embracing sustainable practices. With an increased concern around climate change and the repercussions of their choices, it’s clear that consumers are at the forefront of the longer-term industry trends toward sustainable products (with emerging regulatory pressures not far behind). At the same time, however, 42% of survey respondents expressed doubt about the accuracy of sustainability claims being made in the marketplace. 

So is the food and beverage industry simply full of bad actors? The data doesn’t suggest that. Looking beyond those numbers, survey responses point toward a number of serious challenges faced by brands seeking to establish defensible ESG claims, particularly with regard to the ingredient supply chain. While three quarters of respondents indicated a desire to prioritize suppliers with strong ESG focus, only 16% of survey respondents had any form of technology in place to help identify and filter compliant partners. Without tools and automation in place, the evaluation of supplier partners on ESG criteria remains manual. Unsurprisingly, many respondents cited a simple lack of bandwidth as one of their top reasons for not yet having met their own objectives. 

Supporting credible brands

The recent TraceGains survey clearly reflects a tension between the goals and intentions of many brands, and the challenges posed by the food and beverage industry environment. A complex, global supply chain, heavy workloads, and low levels of technology support/automation all pose real obstacles to brands seeking to drive toward ethical, sustainable sourcing. Making things even more complex is the sometimes-confusing range of topics falling under the ESG umbrella. In exploring the various priorities driving potential environmental, sustainability, and governance investment in the industry, the survey certainly found brands focusing on some unsurprising objectives, with carbon footprint, supply chain transparency, and supplier compliance themes at the fore. But topics such as human rights, ethical sourcing, animal welfare in the supply chain, and ESG-related risk management are earning significant attention as well.  

TraceGains recognizes the enormous efforts being put toward sustainability and strong governance by brands and manufacturers across the F&B industry. A thriving food and beverage ecosystem requires a foundation of consumer trust, and TraceGains has long been an advocate for brands that drive industry credibility. Per “The TraceGains Supply Chain Manifesto”, “Strong brands substantiate front-label claims with verified information, and consumers deserve nothing less. Suppliers who avoid transparency are becoming obsolete. TraceGains stands with forward-thinking companies that embrace practical responsibilities up and down their supply chain.”

Without a doubt, the ESG puzzle has many pieces, and the information required to create a perfectly sustainable, ethical, traceable and transparent global supply chain is still profoundly fragmented. However, TraceGains continues to drive industry partnerships with key ESG data providers, and to leverage the global power of TraceGains Gather™ as a crucial platform for enabling brands to build long-term strategies for verifiable ESG compliance.  

Overcoming challenges with support from TraceGains

While every brand’s pressures and priorities are different, TraceGains provides a range of technology solutions to help brands not only move toward ESG objectives, but to synchronize those efforts with existing priorities around safety, compliance, and regulatory management. 

Streamlining Supplier Data: Unlock the power of seamless supplier management to forge robust connections with partners, drive sustainable progress effortlessly, and streamline essential supplier data.

Compliance and Quality Assurance: Cutting-edge tools skillfully untangle complex regulations, paving the path for effortless compliance and rapid resolution of potential roadblocks.

Collaboration and Innovation: Much like how an interlaced network fuels innovation, fostering connectivity and collaboration naturally accelerates brands’ sustainability objectives, transforming their ambitious goals into a compelling reality.

Ingredient Sourcing: Access to the industry’s most powerful networked ingredients marketplace empowers brands to substantiate their sustainability claims without compromising product quality.

Supply Chain Agility: Embrace adaptability and leverage networked intelligence for technology-driven transparency, navigating volatility while ensuring sustainable operations. Strengthen sustainability claims, build consumer trust, and cultivate unwavering brand loyalty.

Each decision we make holds the capacity to create a greener tomorrow, and many consumers are voting for that future vision with very concrete spending decisions. At TraceGains, we’re committed to helping brands use all the resources at their disposal to build credibility and lasting consumer trust, both for themselves and for the industry. Join the discussion to learn more about TraceGains survey research, and how we can support your own ESG objectives. 

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