Brands must start preparing for EU sustainability rules, says Deloitte27 Feb 2023
The upcoming EU regulation on corporate sustainability is going to change the way the food industry does business. “Start thinking about this now,” urges Emily Cromwell, sustainability partner at Deloitte.
The EU Directive on Corporate Sustainability Due Diligence focuses on human rights, labour, and the environment, calling on manufacturers to gain a full understanding of how this works in their supply chains. The Directive applies to EU and non-EU companies that meet thresholds relating to turnover and number of employees.
The Due Diligence Directive signals a heightened focus, implementation of measures and the introduction of sanctions and civil liabilities to ensure the effective protection of human rights included in international conventions.
Financial reporting regulations will be closely intertwined with the business implementation of sustainability. Areas such as decarbonisation, biodiversity, and waste management will be connected and need the same rigour as current financial reporting. Subsequent reporting will be closely connected to food businesses’ decisions, policies, and actions.
“It is going to be very important that you treat these as bookends and that you don’t make a plan, a strategy or begin a project that doesn’t consider one without the other because they are truly mutual and unable to be separated,” said Emily Cromwell, climate change and sustainability partner and environmental, social and governance lead at Deloitte, speaking to attendees at Fi Europe 2022.
Businesses reporting on their sustainability strategies need to have a baseline for their key performance indicators (KPIs) and implement specific methodology to produce an all-encompassing, transparent, and accurate strategy.
A broader definition: Sustainability includes social governance
“Sometimes, when talking about sustainability, we focus so much on climate change and carbon, sometimes we miss the social and governance side,” said Cromwell.
© AdobeStock/Vitalii Vodolazskyi
From a labour and human rights perspective, one of the challenges is that implementation varies in different countries. “There will certainly be an expectation that you understand multiple tiers of your supply chain,” said Cromwell.
Beyond working with tier one suppliers, passing information on contractual clauses and engagement will be vital amid expectations for transparency and product traceability to source.
Food manufacturers must consider how they protect their businesses and drive good behaviour that increases stakeholder capitalism, which creates confidence, safety, and security in the supply chain. Implementation can involve contractual clauses, supplier engagement and making difficult decisions regarding cost versus ethics.
Cleaning up environmental, social, and governance (ESG)
Conduct a risk assessment and understand what commodities and suppliers are most at risk of presenting a human rights violation. Look at updating enterprise risk management programmes, supply risk assessment questionnaires and technology.
© AdobeStock/Blue Planet Studio
“That identification piece is very process-oriented, it is diligence, but you are also expected to prevent mishaps or issues in your supply chain,” said Cromwell.
Health and safety programmes foster good corporate governance, for instance.
“But whether you are [...] far along in your human rights and supply chain risk and labour and due diligence journey or whether you are beginning, I would just urge you to start thinking about it now,” Cromwell adds.
Quality systems with policies, procedures, checklists, and contractual clauses must comply with the legislation. For broader ESG topics, identify strengths, gaps, resources required, skillsets and underpinning technology and data.
The legislation will affect many facets of food businesses and feature many requirements for supply chains. Therefore, it is essential to start early, consider building a proof of concept, see how your business reacts, iterate, and consider the specific practical steps to implement to overcome hurdles.
“Social issues and human rights are absolutely as critical as the environmental side of ESG, and there is a real face to this,” Cromwell adds.
Israel approves Aleph Farms’ cell-cultured beef in world first
1 Feb 2024
Israel has granted the first regulatory approval for the commercial sale of cultivated beef, joining the US and Singapore in officially recognising cultivated meat’s role towards protein diversification.Read more
Fazer and Solar Foods launch snack bar made with air protein
30 Jan 2024
Finnish food manufacturer Fazer has teamed up with foodtech startup Solar Foods to launch a limited-edition snack bar in Singapore made using a novel, carbon-fed microbial protein.Read more
Big brands invest in precision fermentation-derived palm oil
25 Jan 2024
Although still not approved for food applications, big brands such as Unilever and Doehler are investing in precision fermentation-derived palm oil in a bid to reduce the environmental impact associated with this conventional palm oil.Read more
Supergrain fonio expands its reach in US market
11 Jan 2024
More US consumers will find nutritious, climate-smart grain fonio in supermarkets thanks to a new distribution structure for the import’s most prominent commercial brand, Yolélé.Read more
Sustainability meets innovation at Fi Europe 2023's Sustainability Ingredients Zone
9 Jan 2024
Fi Europe’s Sustainable Ingredients Zone showcases ingredients forging a path toward a greener future. Three innovators are redefining what sustainability within the food and beverage industry means, with upcycled products, regenerative agriculture, an...Read more
Supermarkets innovate with private label plant-based ranges
9 Jan 2024
Plant-based product ranges are an important part of retailers’ private label innovation efforts – and represent an important way for supermarkets to reduce their environmental impact.Read more
The UK prepares to open food security science centre
2 Jan 2024
Amid global food insecurity, the UK government says it is committed to producing crops resilient to climate change and addressing hunger and malnutrition with a food security science centre.Read more
Novel food safety platform could eliminate animal testing
21 Dec 2023
The European Food Safety Authority (EFSA) has introduced a new platform that has the potential to eliminate animal testing in the food industry.Read more
Water-conscious consumers, upcycled food, and tech-driven sustainability: Highlights from Fi Europe, part 2
14 Dec 2023
With climate change becoming a tangible reality, consumers’ environmental concerns are changing. At Fi Europe, market analysts revealed how people are now interested in everyday issues like water shortages and tech-driven solutions such as GM drought-r...Read more
The food industry’s single-use packaging problem
12 Dec 2023
The food industry’s reliance on single-use packaging is a sustainability “sticking point” with viable alternatives not widely available – but new EU rules mean food businesses will remain responsible for the collection and disposal of the packaging the...Read more