The California Senate recently approved Senate Bill 253, the Climate Corporate Data Accountability Act, which could become the first carbon disclosures requirement in the United States for large corporations. As it moves to the Governor’s desk for final approval, companies of all sizes are wondering what this means for them.
If passed, all companies that do business in California will be required to publicly disclose their greenhouse gas emissions, which includes their supply chain emissions (Scope 3). If you are a food or beverage company that sells to companies that earn over $1B – think Costco, Ralph’s, Safeway and so on, you will likely be required to report your emissions to these customers.
Due to the nature of the industry’s operations, supply chains and product offerings, food and beverage has a high carbon footprint and relies heavily on natural resources. A few priority areas for the food and beverage industry include:
Your company is likely thinking about how to address these ESG issues in your business strategies and operations, if not already implementing strategies and tracking progress. Business leaders have an opportunity to invest in cohesive strategies and narratives that both highlight the work that their companies are already doing, while enhancing the goals of the organization and its stakeholders.
How to implement ESG in the food and beverage industry
Based on where your company is in its ESG efforts and the questions you are asking yourself, you might tackle the following:
“Before we start, we want to know what our peers are doing.”
Develop a peer benchmark that illustrates the goals, programs, policies and reporting practices of your peers. This highlights where your industry is heading, what you might be expected to work towards and opportunities for you to lead. Many companies also lean on this as an educational opportunity for those who will be making decisions and implementing this work throughout their organizations.
“We’re overwhelmed or don’t have the resources. What can we do? Where do we start?”
Conduct a materiality assessment to identify ESG topics relevant to your specific business and prioritize them accordingly. A few examples of industry-relevant topics are listed in the table above, but a materiality assessment will specify your exact priority areas, how your organization defines them and what your stakeholders want to see from you in these areas. This process engages internal and external stakeholders, as well as assesses your industry, customers and investors, regulatory trends, and reporting expectations. In getting this comprehensive view of ESG for your company, you have an opportunity to address urgent and potential compliance matters, such as SB 253, mentioned earlier.
Prioritization allows for the most meaningful outcomes and strategic resource allocation. A thorough materiality assessment enabled Vita Coco to shift from three strategic pillars to identifying key focus areas within each pillar, primary opportunities and challenges related to these focus areas, desired outcomes, and the actions and strategies required to get there. This tailored approach has also allowed them to build a team with shared principles, invest in the communities vital to their business success and remain resilient through global supply chain challenges.
“We know our priorities. What’s next?”
Collaborate with your company’s leaders to build an ESG strategy roadmap – their buy-in and engagement are crucial. Create committees based on your ESG focus areas and get input on industry commitments, goals and strategies from your team. These strategies should balance your company’s ambition and reality, acknowledging that this work will continuously evolve and be done over your company’s lifetime. The roadmap outlines goals, key performance indicators, timelines and responsible parties.
“We already have an ESG/CSR/impact leader spearheading this work, but they are only one person.”
More often than not, ESG leaders are on their own to build ESG strategies and implement the work themselves. Whether you have a dedicated ESG leader or ESG is an added responsibility for someone on your team, they are likely asking for support. Hiring a fractional ESG team or an on-demand ESG controller can accelerate your company’s ESG efforts by taking care of areas such as market research, employee education and engagement, or greenhouse gas emissions accounting so that your ESG leader has the space to focus on company-wide goals and strategies.
“Customers, investors, or other stakeholders are asking for specific ESG-related information. How do we keep up?”
Collect data and track progress regarding the ESG topics, metrics and disclosures that matter to your stakeholders. There is plenty of overlap across common ESG disclosure frameworks, customer questionnaires and reporting systems. Once your company builds internal processes for collecting and maintaining a single source of truth for this data, you can begin streamlining each report. To take this one step further, automate your performance management and reporting using ESG technology.
“We’re already doing great environmental or social impact work. How do we get credit for that?”
Spotlight your work by publishing ESG reports, launching ESG webpages or pursuing certifications, such as B Corp. ESG reports and webpages signal to investors that you are committed to long-term value creation. Certifications communicate to customers that you create products with the highest standards of social and environmental responsibility.
How BPM can help
The services in bold above can be carried out by BPM’s ESG team in a variety of ways, allowing flexibility to meet your needs and resources. That might look like guidance through the process, resource development to support your implementation, full third-party execution or automation.
Wherever you are in this process, chat with us about becoming an extension of your team and enhancing your business outcomes. BPM works as your partner in making ESG digestible for your team.
