Transparency is not a choice anymore.
As climate change becomes a tangible reality, many stakeholders panic. Others take radical action, and again others opt for incremental change.
But no one can afford to look away anymore.
According to the latest IPCC report, countless impacts of climate change are already irreversible. Studies confirm that if we continue business as usual, we will be heading towards a 3-celsius degrees warming scenario with speed. We’re literally gambling with the lives of 3,6 billion highly endangered people.
Players in different industries tackle the problem differently. Researchers work on scaling up renewables and carbon capture while investors put more and more money into sustainable businesses. Governments impose regulations, and individuals adopt sustainable behaviors as an unnegotiable part of their everyday lives.
Retailers can also contribute to the solution with relatively little effort. Displaying the CO2 footprint and the environmental impact of their products would make transparency the new normal. And transparency is essential for tackling climate change, as how do we decrease our emissions if we don’t have the data to track it?
Food retailers will need to share the carbon footprint of their products with their consumers in the very near future. Here’s why.
1. Customers Already Want It Multiple surveys show transparency regarding food products has become vital for consumers. According to Statista, 73% of the people would be willing to pay more for products that guarantee transparency.
People don’t only wish to know what goes into the product, although this also plays a key role. They want information about the environmental impacts of the food and beverage products as well.
More and more customers are concerned about the impact the products they purchase will have on the climate, and so they’re willing to pay more for sustainable alternatives. More than 60% of the consumers in Europe and North America rate sustainability as a highly important purchase criterion. What is more, 1 in 3 consumers claims they stopped purchasing certain brands and products because of sustainability-related concerns. Consumers have also become more open-minded when trying out plant-based alternatives. Such plant-based substitutes have moved from being only a niche vegan interest to becoming mainstream in just a matter of years.
To remain competitive, retailers will have to adapt to these new customer expectations.
As customer research has shown, transparency and sustainability are crucial to consumers, this means that the companies who adapt early enough will gain a serious unique selling proposition. They’ll attract more customers, and through their approach, they’ll guide customers toward more environmentally friendly higher-margin products.
Thus, in this case, being sustainable and profitable will go hand-in-hand.
2. Governments will push for it Sustainability is no longer a choice. As governments have already decided to be carbon-neutral by 2050, they’ll start imposing regulations sooner rather than later to reach that target. The EU is planning to introduce “mandatory sustainability labeling and disclosure of information to consumers on products along value chains.”
Today, only around 40 countries and more than 20 cities have introduced a carbon tax. Furthermore, adequate infrastructure for cyclists is also not the norm yet, though there’s progress in that field as well. The EU introduced a circular economy action plan in 2020. It’s good to keep in mind that most of the changes and policies regarding sustainability have only happened recently.
While a net-zero economy is possible, it requires drastic changes in our lifestyle and how we conduct business. Thus, it isn’t naive to assume that governments will impose new policies, regulations, and action plans within the next decade to reach their environmental target.
3. Society Will Abandon Laggards To remain profitable in today’s economy, tackling climate change must be number one on the business agenda. Companies that ignore this issue long enough are deemed to fail.
According to the ex-governor of the Bank of England, Mark Carney, companies that aren’t seriously working on a zero-carbon emissions landscape will be punished by investors and society. Eventually, they’ll go bankrupt.
The start of the process is already visible today.
Customers unite and blacklist products and sometimes even companies that aren’t sustainable enough. Impact and environmental investing are gaining immense popularity. Consequently, society is about to reform the finance sector: money will flow to those who’re part of the climate solution.
It’s only a matter of time until sustainable corporations outcompete those ignorant about the climate crisis.
If retailers care about their success, they’ll display the environmental impact of their products Climate change is not going to leave the retail industry out of the game. It will significantly affect them.
Extreme weather events already disrupt the supply chain. Floods, heat, extreme rainfall, and storms are destroying crops, and in the upcoming years, the impacts of climate change on agriculture and food supply will increase significantly.
Food and beverage products won’t only get scarce and expensive for retailers. The uncertainty associated with extreme weather events is also making insurance prices skyrocket.
Thus, to slow down the pricey consequences of climate change, retailers will have to be part of the solution for their own sake too.
And the solution starts with transparency.