Five reasons why transparency creates credible and sustainable businesses
Sustainability is increasingly business-critical, so companies must be both meticulous and ambitious in measuring, disclosing and assuring what they are doing to be more sustainable.
Why is this good business?
1. It changes how business performance is measured
61%
of retail and consumer businesses say sustainability is changing how they measure financial performance
98%
say they have linked executive compensation to sustainability measures
It’s not, ‘Let’s go green and forget about everything else’. It’s, ‘Let’s continue to be green, and let’s make sure that is against a backdrop of strong financial returns and strong delivery’.
Garrett Quinn
Chief Sustainability Officer, Smurfit Kappa
2. It creates clarity on net zero
of retail and consumer businesses have set measurable sustainability goals based on industry-specific benchmarks
To measure sustainability performance, today’s businesses are tracking:
61%
Scope 1 emissions
53%
Energy use
48%
Water use
35%
Product lifecycle
31%
Scope 2 emissions
3. It builds trust with consumers
of retail and consumer businesses claim they are able to evaluate the impact of their sustainability efforts on the customer experience
The most effective ways to increase transparency among consumers:
Impact reporting 1
Clearly labelled packaging
Annual sustainability reporting
You do what you say, and you say what you do. And you get the trust of the customer because they can see you.
Nina Hajikhanian
Director, DTC EMEA, Patagonia
4. It promotes supply chain innovation
#1 Supply chain ranks as the area of the business where it is most difficult to achieve net zero
To meet net zero targets, businesses are prioritising investment in:
Packaging innovation
Machinery upgrades
Data and analytics technologies
No single company can solve the scale of the sustainability challenges we face on its own, so businesses must be prepared to join others at the table if they are to survive.
Silvia Dávila
President of Latin America, Danone, and Co-Chair for The Consumer Goods Forum in Latin America
5. It improves sustainable investment decisions
of retail and consumer businesses say there is complete transparency at their organisation on how and why sustainability decisions are made
To improve transparency with investors, businesses are focused on:
Impact reporting 1
Traceable supply chains
Green investment frameworks
About the research
The data in this infographic is based on a survey commissioned by Smurfit Kappa and conducted by FT Longitude between October and December 2022. Respondents included 440 senior and executive business leaders from retail and consumer products industries, including fast-moving consumer goods (FMCG) and e-commerce. All respondents have oversight of and/or responsibility for their organisation’s sustainability initiatives, and 25% hold C-suite roles.
1 For the purposes of this study we define impact reporting as: communicating the difference made by a company’s actions to improve or change.