How investing in sustainability drives value for brands

15 Sep 2022

Consumers are increasingly conscious of the environmental, social and corporate governance (ESG) credentials of companies and products they invest in. How can certifications such as B Corp drive value for food and beverage manufacturers?

Increasingly, key players in the food and beverage industry are shifting their corporate strategies to focus less on maximising returns for shareholders, and more on understanding the importance of stakeholder values.

Recently, this growth in ‘triple-bottom line’ thinking has driven several food and beverage giants, such as Nestlé and Danone, to shift attention towards implementing initiatives and attaining certifications to promote sustainable, responsible, and transparent business practices.

How investing in sustainability drives value for brands
© AdobeStock/Tada Images

Whether driven by concern for the wellbeing of planet and its people, or by the opportunities to grow brand awareness and profit margins, the motivations behind this shift towards sustainability in the strategies of large multinationals remains somewhat ambiguous. Nevertheless, the benefits that certifications such as B Corp can offer to all three are clear.

Nespresso attains B Corp status

Nespresso, Nestlé’s Swiss-based global coffee brand, recently announced that it has achieved certification as a B Corporation.

An indicator of high standards of accountability, transparency and performance, this designation adds Nespresso to a list of some 4,500 purpose-driven companies, seeking to improve their sustainability and corporate responsibility rankings.

The B Corp certification by B Lab measures a company’s performance against a range of variables from environmental impact to employee benefits and community outreach.

To achieve the certification, a company must satisfy a set of criteria which include scoring 80 or above on B Lab’s social and environmental risk review, publicly sharing the analysis online, and legally pledging accountability to stakeholders.

“The B Corp process is a rigorous and independent assessment of a company’s impact on people and planet, from its carbon footprint to the way it empowers its employees. Achieving the B Corp certification is a key milestone in the improvement and collective action journey,” said Johnathan Normand, B Lab Switzerland Founder.

The pathway to B Corp certification

To achieve B Corp certification, companies are required to undertake a stringent analysis process, ensuring all data is transparent and publicly accessible.

Although any business can apply to become a B Corp, the pathway to certification varies dependent on criteria such as revenue, company size, and industry.

Regardless of the dissimilarities between companies, certain steps must be taken by all applicants, which include undertaking the online B Impact Assessment, the Disclosure Questionnaire, and providing documentation and evidence to a B Lab analyst for verification purposes.

As well as the assessment, companies must also legally revise their corporate bylaws to accommodate a model of stakeholder governance. The purpose of this added step is to ensure that B Corps are legally accountable to all stakeholders, not just shareholders.

©AdobeStock/eqroy
©AdobeStock/eqroy

How B Corp helps food & drink companies become more sustainable

The so-called B Impact Assessment (BIA) grades a company based on five factors: governance, workers, community, environment, and customers.

Across its five global hubs, Nespresso received a total score of 84, with average points ranging from 29.4% in the community category to 92% in the customer category.

As part of its pledge to positively impact the coffee industry, Nespresso has introduced initiatives such as the ‘AAA Sustainable Quality Program’ which, in partnership with the Rainforest Alliance, embeds Fairtrade coffee sourcing and sustainability initiatives worldwide.

Making sustainable production a business priority, Nespresso also previously pledged to invest CHF 500 million into sustainable operations in the six years leading to 2020.

“B Corp certification reflects a 30-year Nespresso commitment to sustainability, transparency and responsible business. We are immensely proud to be joining a community of like minds who share our belief that profit, and purpose go hand-in-hand,” Guillaume Le Cunff, Nespresso CEO said.

Also aiming to become one of the world’s first B Corp certified multinationals, Paris-headquartered food manufacturer, Danone, is currently seven years into its ten-year plan to become fully certified by 2025. As it stands, the company has an average BIA score of 90, with over 60% of global sales covered by B Corp.

As part of its sustainability drive, in 2020, Danone became the first publicly listed company to adopt the ‘Société à Mission’ status. Defined by the French ‘Pacte’ law, this title represents a company whose purpose and by-laws are determined by its social, societal, and environmental objectives.

For Danone, these aims include impacting public health locally, preserving and restoring the planet’s natural resources, empowering employees, and fostering inclusive growth in the wider community.

How sustainability strategies increase value for brands

The question as to what exactly is driving this sustainable strategy shift however, is an interesting one.

In most cases, the benefits of improving ESG business practices are obvious for both the planet and people. Yet traditionally, investing in sustainability has been seen as a financial burden with unworthy rewards.

As consumers increasingly look beyond products and place more importance on companies’ values, purpose and impact, many businesses are now realising the value and profitability that investing in sustainability can bring.

Take Nespresso’s coffee capsule recycling initiative for example, which since 1991 has sought to provide a means for consumers to recycle Nespresso capsules. With over 100,000 collection points across 59 countries globally, the company now operate at a 90% recycling capacity when it comes to coffee capsules.

In addition to offering clear benefits for the environment in reducing waste and preserving resources, initiatives like this one are also effective in boosting brand sentiment and loyalty, as consumers increasingly place importance on the ESG credentials of companies and products.

In this way, it is clear how implementing sustainable business practises and acquiring globally recognised certifications such as that offered by B Lab, can bring added benefits to brands.

Related news

Healthy, sustainable eating shapes UK specialty product launches

Healthy, sustainable eating shapes UK specialty product launches

14 Sep 2022

From probiotic ice cream to CBD-infused chocolate and chorizo seasoning for plant-based meat, Ingredients Network went trendspotting at the Specialty and Fine Food Fair in London.

Read more 
Sweden’s Green-On develops palm oil alternative from gas and water

Sweden’s Green-On develops palm oil alternative from gas and water

13 Sep 2022

Swedish start-up Green-On is producing an edible fat from carbon dioxide, water, and electricity as a sustainable alternative to palm oil, recently attracting the attention of Nordic investors and Big Idea Ventures.

Read more 
US energy drinks market set for continued growth as shake up continues

US energy drinks market set for continued growth as shake up continues

12 Sep 2022

The lucrative US energy drinks market is set to reach $21 billion by 2026, as rapidly increasing demand for energy drinks leads to a continued shake-up of the CPG marketplace, say experts.

Read more 
PFAS breakdown process sheds light on “forever chemical” use in food industry

PFAS breakdown process sheds light on “forever chemical” use in food industry

9 Sep 2022

PFAS, or per and polyfluoroalkyl substances, are once again in the spotlight after new research details a method for decomposing these “forever chemicals” that have been detected in certain foods.

Read more 
Demographics alone don’t cut it: Euromonitor reveals eight essential consumer traits

Demographics alone don’t cut it: Euromonitor reveals eight essential consumer traits

8 Sep 2022

Is your target consumer a cautious planner, impulsive spender, or minimalist seeker? Euromonitor has identified eight consumer types that businesses – including food operators – should know about.

Read more 
NutriScore algorithm update a ‘step in right direction’

NutriScore algorithm update a ‘step in right direction’

7 Sep 2022

Campaigning organisation Foodwatch International is hailing the update to the NutriScore algorithm as a “step in the right direction” but says there is still space for further improvement.

Read more 
Are new WHO sweeteners guidelines ‘a disservice’ to public health?

Are new WHO sweeteners guidelines ‘a disservice’ to public health?

6 Sep 2022

New draft recommendations from the World Health Organization (WHO) warn that zero-calorie sweeteners should not be used to help weight control or reduce the risk of noncommunicable diseases’ (NCDs) – sparking mixed reactions from industry groups.

Read more 
How the Ukraine crisis may affect the food chain transition

How the Ukraine crisis may affect the food chain transition

2 Sep 2022

From supply issues to price surges, the impacts of the Russo-Ukrainian war on the global food value chain are significant. What pain points has this crisis exposed, and what should the response be?

Read more 
Canadian authorities report titanium dioxide is safe in food, in the face of EU ban

Canadian authorities report titanium dioxide is safe in food, in the face of EU ban

1 Sep 2022

Health Canada joins the UK’s Food Standards Agency in concluding that titanium dioxide is ‘safe to consume’, putting it squarely at odds with recent safety assessments in Europe that led to a ban of the ingredient.

Read more 
Most food businesses are placing inflationary costs on consumers, survey finds

Most food businesses are placing inflationary costs on consumers, survey finds

31 Aug 2022

Consumers are being hit with product price increases as manufacturers pass on higher costs to the public. But with some major food manufacturers registering profits, is a public backlash on the cards?

Read more