Top Sustainability Topics & Trends in 2024 for Consumer Products Companies
A number of material sustainability and ESG issues for consumer product companies gained considerable traction this year.
We expect more attention, investment, and innovation for some of these trends to accelerate even more in the year to come.
In this post we take a look at these need-to-know sustainability trends and offer insight into how brands can approach them in credible and authentic ways.
We also offer some “watch outs” for these trends - places where brands can trip themselves up unnecessarily but can avoid common pitfalls with a little diligence.
Regenerative Food Systems
What’s the trend about?
The concept of a food system is meant to be inclusive of all people and processes that are involved in growing, raising or making food and feeding it to people - as well as what and how we manage wastes.
Similar to other types of product life cycles, many of the environmental and social impacts associated with our foods and other agricultural products can be found in the upstream phases - in the growing, harvesting, and processing stages.
The production phases of our food systems offer key points of leverage for transformation through actions that increase their resilience and their regenerative capacity.
From a global perspective, our food systems represent significant opportunities for creating a more sustainable and equitable world. Transforming key elements of our food systems can have major impacts on our health and the health of our environments.
Several global threats face our food systems–food security, nutritional value, safety and livelihood of farmers and farm workers, the health of the land and more.
Regenerative approaches to agricultural production have social and economic benefits like producing healthier foods, safer work environments, and more equitable farm livelihoods.
Using regenerative practices tends to make the whole food system more resilient, which in turn makes it more sustainable over time.
Regenerative farming often gets lumped with organic agriculture, but they are complementary practices with key differences. Organic farming’s primary focus is producing food without certain synthetic chemicals. While regenerative practices are designed around three pillars: soil health & land management, animal welfare, and social fairness.
While organic production can positively impact soil health, it doesn’t necessarily mean there is an effort to regenerate degraded land and enhance ecosystems like with regenerative.
Organic farming currently has a widely adopted and recognized certification process and is governed by national and international bodies (like USDA Organic).
While regenerative agriculture has been a hot topic recently, it’s rooted in ancient concepts that have been used by indigenous peoples worldwide for thousands of years.
How to approach this trend?
>>Our recommendation: Formulate and source ingredients and materials from credible regenerative organic producers.<<
Regenerative agriculture is getting more mainstream attention despite its historic roots. For the world to see the benefits on a large scale, we need more brands to prioritize producers and suppliers adopting these practices.
If you’re a brand looking to invest in regenerative farming to help address impacts in your value chain, consider adding these elements to your procurement and supplier due diligence process:
Supply chain traceability: Invest time and resources into supply chain traceability to ensure your suppliers adhere to credible regenerative practices since the industry currently lacks regulated standards. Remember, a farm in India is going to have different practices than one from Minnesota even if the goal is the same. Being able to trace what farms your ingredients are coming from, and having an open dialogue with those suppliers about their practices is one of the best ways to evaluate options.
Longer-term contractual commitments: Transformation to regenerative systems take time. Support farmers and communities who are transitioning and learning how to adopt (or re-adopt) these practices to their unique ecological environment. An example of this is happening in the Erode region in India. Known for their production of cotton that has led to higher cancer rates and land degradation (5). Fibershed has launched a project to support the re-ruralization of textile manufacturing.
Policy engagement and industry collaboration: Support growth and easier access to regenerative agriculture by encouraging policy change. This includes the support of items similar to the ones outlined by Natural Resources Defense Council, like: policy reform that promote and rewards regenerative agriculture, investing in infrastructure that creates operational capacity for regenerative farmers, and funding research around the various regenerative farming practices.
>>Watch Out: Regenerative farming varies in practice, has no broadly accepted standard, and is not currently regulated. Get transparency into how suppliers have adopted regenerative farming, including third party certifications like the one from Regenerative Organic Alliance (ROA), to ensure credibility.<<
Value Chain Decarbonization
What’s the trend about?
Calculating a company’s greenhouse gas emissions is step one in taking meaningful climate action. It is a big undertaking and is resource intensive–but imperative.
As you may know, the carbon footprint for a business includes three “scopes”:
Scope 1: Direct emissions owned by a company (ex: gas in owned delivery trucks)
Scope 2: Indirect emissions from a company’s purchased energy (ex: electricity for HQ)
Scope 3: Indirect emissions from across the lifecycle and through the entire value chain (ex: greenhouse gas emissions from mining & processing raw materials)
In the CPG world, most of a company's footprint is often classified as scope 3. This includes the steps in a value chain where raw materials and ingredients are produced as well as where the finished goods are actually manufactured, used by people, and then disposed of or reused.
We’ve seen upwards of 98% of emissions coming from scope 3 for some product categories and industries. That’s why many companies increasingly recognize that meaningful emissions reduction requires decarbonizing their value chains, both upstream and downstream.
If we are going to limit the rise in global average temperature to less than 1.5°C above pre-industrial levels, we must reduce global atmospheric concentrations of greenhouse gasses by about 90% no later than 2050.
Half of the world’s largest companies have committed to a goal of net zero emissions by 2050 with very limited use of high quality carbon offsets. Dramatically reducing emissions from your supply chain is mandatory for achieving a science-based net zero emission goal.
How to approach this trend?
>>Our recommendation: Craft a credible decarbonization plan & share it publicly - then take action<<
You’ve measured. You’ve committed. Time for action. Start by building a decarbonization plan.
We’ve covered the characteristics of credible decarbonization plans in our article “Building a Credible Decarbonization Plan”. Having a robust and publicly available plan will be increasingly necessary to have credibility when it comes to climate action.
Not having a plan or having one that is missing major elements without explanation will be seen as greenwashing with customers, investors, and eventually regulators.
We’ve seen some interesting examples of decarbonization plans already. We like Unilever’s Climate Transition Action Plan as an interesting early example of how these can look - but note a number of omissions that should probably be addressed in future versions.
There are also a number of helpful resources currently available for brands looking to take a DIY approach to building a decarbonization plan and taking action. We recommend starting with the SME Climate Hub action guides.
As you would expect, value chain decarbonization requires some new and innovative approaches to supplier engagement. One of the key barriers to driving emissions reductions in supply chains, particularly with SMEs is related to financing. How can the costs and benefits of actions that reduce greenhouse gas emissions be fairly distributed across businesses in partnership?
>>Watch Out: Voluntary carbon credits rightfully come under scrutiny for multiple reasons related to their actual emissions benefits and permanence - the use of verifiable carbon removal credits should only be considered once you’ve reached your SBT<<
We’ve seen examples of this with other impact-related challenges, like H&M covering the cost of higher wages for workers in Bangladesh. What’s the role of national and international governments in supporting these investments?
One thing is certain: We will need collective action, within industries and across industries as well as amongst governments to achieve the rapid transformation necessary to protect the future of life on this planet.
Protecting Biodiversity
What’s the trend about?
Currently, 1 million animal and plant species face extinction.
Species extinction has happened throughout the history due to natural causes and over long periods of time. But now more species are going extinct at a faster because of humans.
The primary culprit is the conversion of land from natural habitats like forests to agricultural land or human settlements. A root cause of this kind of land conversion (like other sustainability challenges) is the failure of the market to price common goods like natural capital and ecosystem services.
Diverse and resilient ecosystems are absolutely critical to the future of life on this planet because of all the fundamental ecosystem services they provide (clean air, water, stable climate, resources, etc.).
When there are natural disasters like fires and floods, biodiversity helps heal and adjust the ecosystem faster. It also helps contain the spread of certain diseases because of genertic diversity.
Even the level of nutritional value of food supporting all types of organisms (including humans) is linked to rich biodiversity.
We also believe that all species have intrinsic value beyond their immediate value to humans.
How to approach this trend?
>>Our recommendation: Adopt a deforestation-free policy for your business and consider setting a biodiversity science-based target<<
For many brands protecting biodiversity is a material sustainability issue that can feel even more complex than climate change and greenhouse gas emissions.
In many ways biodiversity has a number of key parallels and interdependencies with greenhouse gas emissions.
One key parallel (of several) is that much of the impact is embedded upstream in the value chain of a brand. The issues are interdependent because the loss of biodiversity is closely linked to land use change and deforestation, which directly influences rates of carbon sequestration and greenhouse gas emissions, among other connections.
For brands that have higher-risk raw materials or ingredients in their value chains (e.g. coffee, cocoa, palm oil, beef, soy, rubber, wood), a reasonable starting point should be a deforestation-free policy. This policy should be accompanied by a time-bound goal for conducting and disclosing appropriate supply chain due diligence.
For more on getting started with responsible sourcing & supply chain sustainability please see our article here.
For brands doing business in the European Union, you’ll want to get moving on this quickly as the EU Deforestation Regulation (EUDR) became effective in June of 2023.
We’ve seen the application of science-based targets (SBTs) to help reduce greenhouse gas emissions and limit the worst impacts of climate change.
Now the concept is being applied to help address the dramatic loss of biodiversity happening in ecosystems across our planet.
A science-based target approach for protecting biodiversity is similar to climate and they should work together - we need to avoid impact shifting and consider dynamics across categories of impact in a systematic way.
Like other SBTs you need to use the latest science to establish clear, evidence-based goals for organizations. The Science Based Targets Network (80+ environmental non-profits and mission-driven organizations) has recently unveiled the first nature targets for businesses, in which biodiversity is one of the elements.
>>Watch Out: A growing number of “naturetech” firms have entered the market recently - often focused on developing nature-based projects with a biodiversity focus to sell as credits. Similar to the purchase of voluntary carbon offsets, businesses should approach these investments with a high degree of caution and extra due diligence.<<
Sustainability Integration & Governance
What’s this trend about?
We hear this a lot: “sustainability must be part of corporate strategy” to make progress. That’s true. But how it’s integrated can make a huge difference in successfully implementing programs at an enterprise level and achieving your goals.
For us, the simplest way to think about sustainability integration is to consider how materially relevant impacts (in other words sustainability risks relevant to the products or goods you provide) are embedded into business decisions including strategy development and funding.
At the core of business decisions is the allocation of resources (time, expertise, money, materials, etc.) in pursuit of your mission. Where you spend your money is the simplest reflection of what you value.
Here’s three reasons why integrating sustainability into your business operations matters:
Your business will struggle to make real, lasting progress on your sustainability goals without robust integration into your business decisions.
Your sustainability function will be chronically underfunded because the work involved is not effectively linked to the full value it creates.
Fewer people will feel responsible for addressing sustainability impacts as part of their jobs and the level to which they choose to collaborate on those efforts.
When you fully integrate sustainability into your business decisions, processes, and operations you can transform the way the world impacts your business and the way your business impacts the world.
You can move from trying to mitigate your negative impacts to supporting more regenerative, circular and resilient systems - transitioning from an organization that may compromise our future to one that nurtures it for future generations.
When done well, sustainability integration can be one way to transform your enterprise business model.
We wrote more about that here. So while the idea of sustainability integration is simple (embed it into decision-making), proper execution for your business is a complex mix of art & science.
How to approach this trend?
>>Our recommendation: Build these 3 foundational elements to effectively integrate sustainability into business decision-making.<<
Foundation 1: Setting Sustainability Goals and Building Them Into OKRs for Widespread Buy-In
Building goals and enterprise objectives & key results (OKRs) that link those high-level goals to nearer-term plans and action is a critical foundation for sustainability integration.
Foundation 2: Develop Supporting Strategies to Ensure Success
Similar to how sustainability is integrated into enterprise goals, we see a similar dynamic when it comes to strategy: Stand-alone strategic pillars focused on sustainability-related impacts or sustainability issues (risks and/or opportunities) embedded into other top-line strategies. On occasion we see both.
Foundation 3: Establish Planning & Governance Measures to Support Multi-Year Execution
Effective sustainability integration requires translating strategy into where the real decision-making happens in a business - operational plans, department roadmaps, financial plans (aka budgets), and corporate governance. This is where we have unique expertise and experience.
You can learn more about these elements in our article: “Wondering How to Successfully Integrate Sustainability Into Your Business? Here's How”.
While having sustainability and impact embedded in the mission statement of an organization can certainly help when it comes to the transformation necessary to successfully integrate sustainability, it’s not a requirement. Changing an existing mission statement can also be an incredibly time consuming and challenging process - so unless you’re launching a new business then this may not be worth the effort.
The amount of time and effort to successfully change a mission statement can be applied to integration in the operational areas of business decision making with greater impact and speed.
Also, mission statements can often be interpreted to mean many things, which makes them pliable enough to justify many strategic decisions.
>>Watch Out: There isn’t a one-size-fits-all approach to sustainability integration. Success depends on understanding the specific organizational landscape and business operations to find key points of leverage and address barriers.<<
Article Sources
National Resource Defense Fund (2021). “Regenerative Agriculture Part 4: The Benefits.” Accessed at https://www.nrdc.org/bio/arohi-sharma/regenerative-agriculture-part-4-benefits on 12/12/23.
The Nature Conservatory (2023). “Food, Climate and Nature FAQs.” Accessed at https://www.nature.org/en-us/what-we-do/our-priorities/provide-food-and-water-sustainably/food-and-water-stories/climate-friendly-food-faqs-regenerative-ag-101/#:~:text=By%20enhancing%20soil%20health%2C%20crop,like%20droughts%20and%20heavy%20storms on 12/12/23.
National Resource Defense Fund (2022). “Regenerative Agriculture: Farm Policy For The 21st Century.” Accessed at https://www.nrdc.org/sites/default/files/regenerative-agriculture-farm-policy-21st-century-report.pdf on 12/12/23.
Rainforest Alliance. (2023). “The Indigenous Roots of Regenerative Agriculture.” Accessed at https://www.rainforest-alliance.org/insights/the-indigenous-roots-of-regenerative-agriculture/ on 12/12/23.
The Indian Express (2009). “Alarming increase in cancer cases in TN textile hub.” Accessed at https://indianexpress.com/article/lifestyle/health/alarming-increase-in-cancer-cases-in-tn-textile-hub/ on 12/12/23.
Regenerative Organic Alliance. (2023). “Framework for Regenerative Organic Certified”. Accessed at https://regenorganic.org/wp-content/uploads/2023/03/Regenerative-Organic-Certified-Framework.pdf on 12/26/23.