The Latest FMCG Sustainability Trends and Mounting Importance of ESG DataArticle
Globally, sustainability is a key concern for companies across multiple industries, one of the most important areas for improvement when it comes to future business development.
The Fast-Moving Consumer Goods (FMCG) industry has been in the spotlight for many of these conversations, and FMCG businesses are quickly embracing new practices and initiatives to ensure they are operating in a way that is socially and environmentally responsible.
Let’s explore some FMCG sustainability trends and why looking at sustainability can help you get started into making sure all your ESG data is in order.
Sustainability Trends in the FMCG Industry
- Packaging Innovation
Packaging is a crucial component of the FMCG industry, and companies are increasingly looking for ways to reduce their environmental impact by innovating with their packaging solutions to move toward zero waste. This includes designing more sustainable packaging, using recycled materials and exploring alternatives to plastic such as glass, cornstarch, mushroom and seaweed!
- Sustainable Sourcing
Sourcing sustainable raw materials is a big challenge for FMCG companies, but it is no longer possible to ignore. Sustainable sourcing requires a transparent supply chain that consistently tracks ESG data in an accurate way. Sustainable sourcing ensures that companies are not contributing to deforestation, exploitation of natural resources, damage to the environment or human rights violations.
- Circular Economy
A circular economy is an environmental approach that prioritizes sustainable development through the reuse of materials and the minimization of waste. Companies in the FMCG industry, such as Patagonia, Ikea, Unilever and H&M, are implementing circular economy practices, using recycled materials, reducing waste and developing closed-loop systems.
- Carbon Neutrality
Carbon neutrality is a critical goal for many FMCG companies as they seek to reduce their carbon footprint. It means investing in renewable energy, reducing energy consumption and emissions across the value chain and offsetting any remaining carbon emissions. It’s an industry challenge that won’t disappear anytime soon. The World Economic Forum recently stated Food and FMCG industries together produce more than one-third of global emissions, which mainly come from their upstream supply chains.
Why Good ESG Data is So Important
Reliable Environmental, Social and Governance (ESG) data is critical for measuring a company’s sustainability performance and its impact on society and the environment. It is imperative for FMCG companies to get a good handle on their ESG data and reporting for the following reasons:
Transparency – Good ESG data provides transparency into a company’s sustainability practices, enabling stakeholders to make informed decisions about their investments and operations and remain competitive.
- Risk Management – ESG data helps FMCG companies identify potential environmental, social and governance risks, enabling them to effectively mitigate these risks.
- Brand Reputation – Consumers are demanding more responsible and ethical practices—and that trend is not going away. Good ESG data can help companies build a positive brand reputation by demonstrating their commitment to sustainability.
Starting to examine the sustainability status and progress of a company means diving into sustainabilty data. This is where a lot of businesses get stuck, because sustainability data can be quite complicated. But the very process of starting to focus on one area, such as sustainability, allows you to replicate the same investigation into the two other types of ESG data (social and governance), providing you will the tools you need to achieve greater ESG conformance and a more positive brand reputation.
FMCG companies that prioritize these sustainability trends and implement good ESG reporting will ensure that they operate in a socially and environmentally responsible way and consequently, be better positioned to succeed in the future as sustainability regulations and reputations continue to mount in importance.
Explore how DataAssured can help your organisation manage its data quality, build trust across the FMCG industry and enable quicker, more impactful decisions to achieve your sustainability goals.
You may also like to read our eBook: Generating Value with Sound ESG Data Management