Accurate Carbon Accounting Data can Unlock Sustainable FMCG Supply Chain Management
When it comes to emissions reporting, Fast Moving Consumer Goods (FMCG) brands are caught between a triple threat of discerning customers, a hostile climate and stringent regulators. With the scope of emissions reporting set in stone by the GHG Protocol, Scope 3 (supply chain) emissions calculations are becoming an unavoidable fact of life, no matter how fast your supply chain moves or how far it reaches.
FMCG businesses might have even more plates to spin than any other industry. With regulations, consumer demands, the spectre of greenwashing, real climate risk, opaque supply chains, dodgy data, and more sustainability partnerships and commitments than you can count, sustainability managers in FMCG businesses are earning their salaries.
There is a dearth of accurate, accessible supply chain data for FMCG businesses and too much low-quality data obscuring the truth. It’s no wonder many FMCG businesses feel lost in the flood.
Businesses that are bamboozled by supply chain emissions calculations might miss out on the efficiencies and opportunities emissions reduction affords. They need the ability to see the forest for the trees and make adjustments that minimise risk and maximise benefits.
That’s why FMCG businesses need data that gives them full supply chain visibility. Partnering with Emitwise gives businesses access to their entire operations and the peace of mind that they’re working with the most accurate data.
FMCG Businesses Need to Insulate Themselves from Risk, both Climate-related and Regulatory
The scope of sustainability legislation covers more and more products, which means more and more businesses. All of these businesses are going to have to take action on climate risk in their supply chains and deliver the evidence of that action to the authorities.
Not only that, businesses in FMCG need assurance that the data they’re delivering doesn’t deceive. Global anti-greenwashing legislation is coming. This means sewing that data up tight, making sure it’s the most accurate on the market so as not to fall foul of unwarranted and costly greenwashing scandals.
It’s not just businesses’ reputations at stake; they’re exposed to climate change-related risks that can, and will, be translated into eye-watering $$ values. Failure to take supply chain emissions seriously could cost FMCG businesses billions. Net zero targets and methodologies backed up by scientific verification and concrete data are required. Businesses won’t be able to do that alone. They’ll need a partner to help them gather and deliver the supply chain data they need.
Consumers are Choosing Sustainability: It’s the Wise Choice
Kantar estimates that $1 in every $5 spent is on FMCGs. FMCG is one of the most consumer-driven sectors out there, and the habits of consumers ought to be echoed in the habits of FMCG businesses. A 2020 Capgemini study found that 79% of consumers are changing purchasing preferences based on sustainability. Today’s discerning consumer is concerned about a lot more than just price, and it behoves FMCG businesses to share in the wisdom of their customers.
Market share in FMCG is increasingly tied to sustainability. There’s a reason why 75% of businesses have directed Merger and acquisition efforts towards the acquisition of niche, environmental businesses in the last five years: sustainability is good for the planet, and it’s also good for business.
The link between competitiveness in business and emissions reduction is only getting stronger as the most competitive brands establish themselves as the sustainable choice. Mckinsey’s advice makes this clear: The longer that others wait to devise their own strategies for procuring low-emissions resources, the more likely they will end up at a disadvantage.” FMCG businesses must move quickly to snap their share of the pie up before it goes stale.
Best Laid Plans Are Ok, But There’s No Impact Without Implementation
Emitwise can help businesses identify and map emissions risks in the supply chain to determine where the most work is needed and keep them on the front foot. Taking a birds-eye, full operations view of the supply chain will deliver insight into policy gaps and quickly plug them.
Speaking of gaps, a recent survey revealed a disconnect between stakeholders and procurement teams, hindering the ability to reduce emissions in the supply chain. Procurement teams need a robust infrastructure that keeps them up to date on the business’ sustainability strategies and allows them to make responsible sourcing decisions that align with those of stakeholders. This is especially true in FMCG supply chains, where sprawl and disparity among stakeholders can cause communication issues.
How to remove the data gaps preventing decarbonisation
Emitwise uses data from multiple credible emissions factor databases curated just for FMCGs. The data is combined with machine learning, insights from their own work, and a team of carbon accountants with over 100 years of industry experience between them.
Emitwise further enables companies to engage their supply chain for primary data directly. Regardless of a supplier’s maturity, our Procurewise platform meets them where they are, including providing a free automated calculator for first-time carbon footprinters.
These calculations are transformed into supplier emission factors that increase the accuracy of the carbon accounts used by the company to make low-carbon procurement decisions and decarbonisation actions. Emitwise’s carbon data allows FMCGs to engage with suppliers and confidently implement emissions reduction strategies, secure in the knowledge that their action rests on solid, accurate data.
The benefits of embedding sustainability into business decisions are manifold. Businesses will have an early foot in the door for regulatory compliance, secure future market share, impress eco-savvy consumers, and unearth new opportunities for streamlined operations in their supply chain. Move fast and book a demo that secures the goods sustainably.
