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Calling on FMCG businesses: you need a long-term approach to sustainability

Concerns about the impacts of climate change are growing among consumers everyday. Plastic bag bans and container deposit schemes are just snippets of the raft of positive change that is being generated every day.

But with FMCG companies responsible for so much waste, are they doing enough? British environmentalist and writer Jonathon Porritt doesn’t think so.

Porritt is the co-founder of Forum for the Future, a sustainability non-profit working globally with business, government and others to accelerate the shift toward a sustainable future. With members based in London, Cheltenham, New York, Singapore and Mumbai, the organisation aims to transform critical systems such as food and energy to make them fit for the challenges of the 21st century.

Inside FMCG spoke with Jonathon Porritt ahead of his talk at the Food and Grocery Australia conference in Sydney later this month.

Inside FMCG: Where are FMCG companies falling down most in terms of action on environmental issues?

Jonathon Porritt: FMCG companies have been getting better and better at what I would call incremental improvement in terms of doing less harm to the environment and to people. It’s important to start there; one has to pay tribute to the huge amount of work done over the last decade to reduce the negative impact.

[However] that doesn’t mean they’ve been thinking really proactively about, what we in the forum call a net positive approach, where instead of just being comfortable with doing less harm you organise your entire strategy around social value and environmental value to the idea of becoming net positive.

I think they’ve now been caught out somewhat because in the last year or so we have seen a rapid acceleration of scientific reports into just how fast things are moving on both climate and biodiversity, equity issues, supply chain issues, transparency; we’re having to rethink the ways in which we address these. The planet and its people are telling these companies that actually ‘ok’ isn’t good enough any longer because we are in these converging emergencies.

Inside FMCG Do you think companies moving towards recycled plastic packaging, for example, are doing enough or are they simply trying to keep consumers happy for the moment?

I guess it’s good that it’s happening and I like the fact that the commitments that are being made now by the big FMCG [businesses] are accelerating. There is a kind of competition in target setting now, a sort of minimum standard regarding use of recycled plastic or whatever else a particular area might be which means you can’t really fall below that. That’s all good and it’s good that this has unleashed some incredible new innovation because one of the big consequences of this focus on plastic is the way in which companies have upped their game in innovating for new solutions.

I take my hat off to the people that are innovating as well as just committing to more recycling; but is it enough? Not yet. We haven’t really seen much emphasis on the circular economy, longer term approach to reducing the use of plastic in many of these supply chains because I think that companies are just beginning to realise that you can’t just swap out non recycle plastic for recycled plastic or one kind of plastic for another kind of plastic. You have to have a much longer term strategy essentially to get the basics of a circular economy approach into all of their supply chains.

Inside FMCG: How is climate change already affecting FMCG companies?

I have heard more and more of companies that are doing their risk analysis about security of supply very differently and have begun to take into account the likelihood that some of their supply chains, old reliable supply chains, are going to be disrupted by climate impacts and are needing therefore to prepare more contingency planning so they’re not very negatively affected by those climate induced risks in the supply chain. And I think that is pretty important really because there was a time when most FMCG companies would have thought about how they could make themselves more energy efficient for example, but they really weren’t thinking strategically about impacts through their supply chain.

This is operating in a number of different levels now, some of them are pretty painful and short term – addressing suddenly a planet full of people who are very concerned about plastics when they really weren’t up until about two years ago – and some are very long term, as in a growing sense of awareness on the part of consumers as to climate issues, biodiversity and so on. So they’re having to address these things in different time frames and be much better prepared to come forward with proactive planning.

Inside FMCG: Do you think social media plays a large part in consumer awareness of these issues?

Absolutely, and I think by and large that’s not a bad thing. It worries me sometimes when the way in which social media responds disproportionately to a particular issue or a particular exposé of something and then the whole thing is taken significantly out of proportion.

I’m very concerned about the ways in which social media has pretty seriously unbalanced the whole debate about the use of palm oil, obviously a very controversial area for many, many years. Social media has persuaded an awful lot of people around the world that “palm oil is bad” rather than trying to find sustainable sources of palm oil and turn their back on unsustainable sources of palm oil which to me is obviously the desired goal at the moment.

Boycotting palm oil is just about the most stupid thing you can do if you have a concern about protecting forests and biodiversity and limiting damage to climate change, but it’s quite difficult sometimes to put that out to people because social media has got swept up in this whole notion that palm oil is by definition massively destructive everywhere in the world. There is no sense of proportionality or balance in the social media approach to this.

Inside FMCG: So what do you think will be the next big thing to come under the social media spotlight?

I’m pretty sure anything to do with meat is right in the frame now, beef in particular, because of the analysis done at great length over the last ten years about the disproportionate impacts of beef production on environmental social and health concerns. I think we’re beginning to see a pretty dramatic shift away from an automatic assumption that consuming meat is okay and that consuming beef is okay. I think we’re going to see a lot more shifting dietary and nutritional patterns particularly amongst young people. And I do think this will have a very profound impact on beef production even if it takes quite a few years to materialise fully in the supply chain.

Inside FMCG: What kind of advice would you give to companies who want to create a more sustainable future?

I bet if you talk to a lot of procurement directors or chief sustainability officers or strategy directors in some of these companies they’d see all of this as just one whole threat to conventional business models and they’d be grumpy about having to constantly evolve what they have discovered over many years was a fairly reliable and value based way of doing it, but the most important thing of all is that they begin to change the collective mindset inside leadership teams in these companies.

They have to embrace the fact that this is now an absolutely unstoppable evolution towards much more sustainable ways of bringing people the goods and services that they demand and there’s a hell of a lot more of that stuff coming down the track at them. So doing one of what I would call this kind of episodic incrementalism isn’t going to help them very much. It won’t do them any damage but they really need to think through much more systematically how they can put themselves in a position [to serve the consumers of] 2025/2030, a generation who are better informed and more concerned [about the environment]. They [FMCG companies] need to know what the expectations will be of them in that period of time not what the pressure looks like for dealing with this problem or that problem by the end of the year.

Jonathon Porritt is a co-founder of Forum for the Future. He will be speaking at the Food and Grocery Australia conference in Sydney on May 28-30.

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