Reuters Impact: From suppliers to costs, sustainability goals challenge companies
06/09/2023 15:43
By Richa Naidu, Helen Reid and Emma Rumney
LONDON, Sept 6 (Reuters) - As they endeavour to meet
lofty sustainability goals, companies from Japan's Asahi
3333.T to retailer John Lewis face challenges like confusion
among suppliers, tough legislation, and friction with top
management over costs, executives said.
Under pressure from regulators and investors, more companies
have in recent years set targets for their business, from
cutting water use to reducing "Scope 3" emissions, referring to
all indirect emissions, for example from suppliers and
customers.
But the upfront cost of investments needed to curb emissions
can cause friction within companies.
"You will not see returns on (sustainability) investments
for 10, 15, 20 years... of course it's going to look expensive,"
said Preeti Srivastav, group sustainability director at Asahi
Europe & International, speaking on a panel at the Reuters
IMPACT conference in London.
"There were a lot of chairs and tables flying around in
every boardroom," she joked, adding: "But I think now everyone
is trying to make peace."
Other than costs, challenges when it comes to addressing
Scope 3 emissions include getting detailed data and
incentivising suppliers and consumers to help, Mark Chadwick,
managing director of sustainability solutions at consultancy
Engie Impact, said on the sidelines of the conference.
For UK retailer John Lewis, most of its Scope 3 emissions
are the result of animal protein, so reducing those emissions
will require selling less meat and getting shoppers to switch to
alternatives, said Marija Rompani, director of ethics and
sustainability at John Lewis.
WORKING TOGETHER
While regulation plays a role in helping companies meet
their goals, some feel it also acts as a constraint.
"I think we need regulation on reporting, disclosure, data
and all that good stuff. But at the same time, one of the side
effects of very heavy regulation is the fear of
experimentation," Asahi's Srivastav said. "There needs to be
some room for freedom to experiment and fail."
Managing suppliers plays a major role in companies meeting
sustainability goals but doing so can prove difficult.
"When we're working with suppliers, in particular farmers,
they're being asked for very different things from different
customers and that creates real challenges," Andy Griffiths,
head of sustainable procurement at spirits maker Diageo, said
during a panel at the conference.
"They don't have the time and resources for that and it
creates confusion... so I think one of the areas where we need
to collaborate closely is standardisation rather than going
after our own specific practices."
Some companies are going so far as to work with rivals to
exchange best practices on issues such as decarbonising their
value chains.
"On the biggest emitting suppliers who have fairly mature
approaches to decarbonising their business, we're collaborating
really deeply and working with them on their products and
services," British broadcaster ITV's chief procurement officer,
Jay Doyle, said on the same panel.
"We can't do that on our own so in order to make a real
impact, we're collaborating with our competitors within the
industry."
To view the live broadcast of the Road to COP Stage go to
the Reuters IMPACT news page:
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(Reporting by Richa Naidu; Editing by Sharon Singleton)
((richa.naidu@tr.com; Follow me on Twitter https://twitter.com/Richa_Writes;
+44 755 755 9587;))