Fi Global Insights Sustainability Survey Results 2022
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European food industry expresses overwhelming support for mandatory government-established sustainability standards Ninety percent (90%) of European food industry actors are in favour of governments establishing a minimum legal standard for corporate sustainability and due diligence, according to a recent Fi Global Insights survey, with 81% saying firms should be penalised for non-compliance. In February 2022, the European Commission adopted a proposed regulation to ensure sustainability and corporate social responsibility (CSR) throughout global value chains. The Directive on Corporate Sustainability Due Diligence will require companies to identify and (where necessary) prevent, end, or mitigate adverse impacts of their activities on human rights, such as child labour and exploitation of workers, and on the environment, for example pollution and biodiversity loss. Aimed at advancing the green transition and protecting human rights in Europe and beyond, the EU says the new rules will give businesses legal certainty and create a level playing field while providing more transparency for consumers and investors.
Shifting the current economic model Didier Reynders, EU commissioner for justice, said he was confident that many business leaders would support the Directive, calling the proposal a real game-changer in the way companies operate throughout their global supply chain.
“With these rules, we want to stand up for human rights and lead the green transition. We can no longer turn a blind eye on what happens down our value chains,” Reynders said. “We need a shift in our economic model. The momentum in the market has been building in support of this initiative, with consumers pushing for more sustainable products.” In order to gauge support for such regulatory frameworks, Fi Global Insights conducted a survey, asking our readers what they thought of such regulatory frameworks, what our readers’ priorities for doing business sustainably were, and who should foot the bill.
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Survey reveals overwhelming support for government intervention To carry out this survey, we questioned our European database, made up of 34,000 companies, and received hundreds of responses from a wide range of entities. These ranged from multinational groups that generate billions in annual turnover to small and medium enterprises (SMEs), and from non-profit organisations to governmental food and trade departments. While businesses are known for being averse to change, our survey revealed overwhelming support among respondents for government intervention to ensure sustainable targets are met whilst creating a level playing field for businesses. A massive 90% agreed governments should establish a minimum legal standard for corporate sustainability and due diligence. Only 10% said they opposed such mandatory action.
Should governments establish a minimum legal standard for corporate sustainability and due diligence? Yes
90%
No
10% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Most of our readers (84%) said that the EU Due Diligence Directive, and other similar regulations, would impact current global agri-food supply chains. A strong majority of our food industry respondents – who hold roles as diverse as business developers at government trade bodies, R&D directors at global suppliers, marketing managers, and consultants at non-profit organisations – were also in favour of such regulations having teeth. Eighty-one percent (81%) said businesses should be penalised if they did not adhere to the minimum legal standard for corporate sustainability and due diligence. Nearly one-fifth (19%) said they should not be penalised.
Should companies be penalised if they do not adhere to the minimum legal standard for corporate sustainability and due diligence? Yes
81%
No
19% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nevertheless, there was also a desire for flexibility and freedom. Sixty-two percent (62%) of participants wanted companies to be allowed to define their own corporate sustainability standards.
Fi Global Insights Sustainability Survey Results
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Paying the price of sustainable change In an opening address at the United Nations’ Climate Action Summit in 2019, UN secretary general António Guterres said:
“There is a cost to everything. But the biggest cost is doing nothing.” Among our respondents, there was a general agreement that companies should do business in a more environmentally sustainable way and be prepared to accept a reduction in profits to achieve this. Over one-third (34%) strongly agreed with this statement and 38% somewhat agreed; only 9% somewhat disagreed and 6% strongly disagreed.
To what extent do you agree with the following statement: ‘Companies should do business in a more environmentally sustainable way, and be prepared to accept a reduction in profits to achieve this.’ 38%
Somewhat agree
34%
Strongly agree 13%
Neither agree nor disagree 9%
Somewhat disagree
6%
Strongly disagree 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
However, our food industry respondents – who are, of course, also consumers of food – wanted to see efforts made by individual consumers too. Nearly three in 10 (29%) strongly agreed that consumers should buy food and drink produced in an environmentally sustainable way and be prepared to spend more money for such products, while almost four in 10 (39%) somewhat agreed with this statement. Only 15% disagreed.
Identifying areas for action Sustainability and corporate social responsibility are, of course, hugely diverse and multifaceted topics with a myriad of possible actions. When asked which actions were most important to creating a sustainable food industry with regard to climate change and the environment, the diverse answers given by survey participants reflected the complexity of the challenge at hand. Nevertheless, some consensus emerged. Reducing greenhouse gas emissions, protecting biodiversity, reducing water pollution, reducing plastic waste, protecting workers’ rights, and using ecologically friendly processes were identified as action points with high importance.
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Forty-five percent of participants said reducing greenhouse gas emissions was the most important area of action, the highest score for any single action. Some readers suggested plant-based proteins as an additional area for action. However, precision fermentation and cell-cultured agriculture to produce animal-free meat and dairy proteins – current hot topics in the industry that are seeing millions in investment – were not identified as significantly important.
Area of concern
Level of concern
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2
3
45% 14% 11%
Reducing greenhouse gas emissions
13% 24%
Reducing plastic waste 16%
10% 14% 20%
Protecting biodiversity
9% 20% 17%
Reducing water pollution 7% 5% 6%
Protecting workers’ rights
6% 2% 4%
Supply chain transparency
3% 4%
Ecologically friendly processes
9% 1% 3% 4%
Improving animal welfare
Third party certification
1% 1% 0%
Genetically modified crops
1% 0% 1% 0% 5% 3%
Recyclable packaging 0%
4%
Reducing pesticide use
8% Precision fermentation (e.g. cell-cultured meat and dairy)
0% 0% 0% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
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From regenerative agriculture to renewable energy All of our survey’s participants (100%) said their company already implements a due diligence process for sustainable business, and all companies had also implemented specific environmental or social actions within the past 12 months. When asked to give examples, the variety of measures cited again reflected the multifaceted nature of sustainability. Reducing energy consumption in general and reducing reliance on fossil fuels by switching to greener or renewable energy sources, such as solar energy and biogas, were widely cited actions, as was reducing the use of plastic and finding plastic alternatives. Use of organic or regenerative agriculture was another widely cited action point while several respondents said their companies were working towards achieving B Corp certification. Reducing waste products, improved waste management, and upcycling waste materials were other strategies. For some companies, it was all about starting the journey towards a more sustainable business: many respondents said that, within the past 12 months, their company had established key performance indicators (KPIs), created CSR working groups, or developed a sustainable strategy with clear objectives and metrics. Other respondents said working with third parties, such as certifying bodies, universities, and non-profit organisations, was key to achieving their sustainability objectives. Several respondents said they had switched to local or regional sourcing for raw materials. Almost all participants talked about multi-pronged approaches to achieving more sustainable businesses. Nevertheless, almost two-thirds (64%) said they thought their sustainable actions or CSR frameworks were not sufficient to tackle the current climate crisis.
Which companies will be affected by the EU Directive? The rules will apply to EU-companies that have more than 500 employees and a net worldwide turnover of more than €150 million, or EU companies with more than 250 employees and a net worldwide turnover of more than €40m – provided that at least 50% of this net turnover was generated in a ‘high-risk’ sector. High-risk sectors include food manufacturing, agriculture, forestry, and fisheries, as well as textiles and clothing. The rules also apply to non-EU companies that have a net turnover of more than €150m generated within the EU; or between €40m and €15m, provided that at least 50% of its net worldwide turnover was generated in one of the high-risk sectors. Businesses must bear the cost of establishing and operating the due diligence procedures to ensure compliance with the new rules. According to an estimate by FoodDrinkEurope (FDE), the trade association that represents European food and drink manufacturers, around 2,500 large food industry enterprises fall within the criteria. David Pineda Ereño, legal expert and managing director of Brussels-based DPE International Consulting, said that the nutraceutical and functional food industries will also be largely impacted by the Directive.
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Key takeaways • The vast majority (90%) of our respondents were in favour of a minimum legal standard for corporate sustainability and due diligence, with 81% saying firms should be penalised in the event of noncompliance. • Many respondents (62%) also wanted companies to be able to define their own corporate sustainability standards. • Reducing greenhouse gas emissions, protecting biodiversity, reducing water pollution, and reducing plastic waste were identified as important areas of action. • All respondents said their companies currently implement a due diligence process for sustainable business. The ways in which they do so are hugely diverse, indicating the complex and multifaceted nature of striving to achieve sustainability objectives. • Despite this uptake, almost two-thirds (64%) thought these measures were not sufficient to tackle the current climate crisis.
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08/11/2021
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