In his monthly column, Oliver Balch analyses the latest sustainability news, from diversity and inclusion to the newest net-zero sign-ups
February is a difficult month for U.S. brands. Across the country, everyone from schools and civic associations to charities and government agencies are sharing positive messages about Black achievement. For U.S. brands, hitting the right tone during Black History Month is a tricky one, especially in light of last summer’s race riots. UberEats has said it will waive delivery fees for users ordering from Black-owned restaurants. Some clothing brands, like Nike, GAP, Under Armour, are hawking limited-issue merch. Other retailers, like Target and Nordstrom, are using their platforms to spotlight their favourite Black-owned suppliers. So, are such actions meaningful or tokenistic?
Critics are not hard to find. A recent Washington Post opinion piece captures the ire felt by many. Under the headline, ‘I don’t need or want corporations celebrating Black History Month’, the author (a Back millennial) describes the celebratory brand messaging during these 28 days as “routine”, “empty” and “farcical”. There are two basic criticisms: the first is “show, don’t tell”; the second is what about the other 11 months of the year?
Both are fair points. Brands struggle with the “show” piece because, frankly, there’s often not much to show. Black History Month has been running in the U.S. since 1976, yet the boardrooms of today’s Fortune 500 count only three Black CEOs, Marvin Ellison at Lowe’s, René Jones at M&T Bank and Ken Frazier at Merck. Though Frazier, who has been a leader in the U.S. business community on race issues, will be stepping down in June, Walgreens can be added to the list, as Starbucks’ number two Roz Brewer will take up the CEO reins next month.
It is neither a new problem (there have only been 19 Black CEOs in the Fortune 500 since 1955) nor one unique to the U.S. The UK, for example, which ran an inaugural Race Equality Week at the start of February (and holds its own Black History Month every October), has zero Black chief executives in the FTSE 100 at present. The same, incidentally, is true for chairpersons and chief financial officers. According to a new report by UK recruitment agency Green Park, ethnic minorities represent a mere 0.9% of those in the leadership pipeline, suggesting a change is unlikely any time soon.
Clearly, proactive policies to rebalance the situation are critical. In the case of gender diversity, legislation requiring companies to report their leadership stats has helped twist arms. Rules on race could do the same. As a starter, it would ensure brands have systems in place for tracking progress on ethnic diversity, an issue that half of major retailers, food service providers and food manufacturers identify as their “biggest problem”, according to recent research by consumer goods organisation IGD. Such failings point to a more systemic problem of weak governance. Last month’s decision by broadcaster Sky to establish a Diversity Advisory Council is welcome, for instance, but it raises questions over who had oversight of these issues beforehand.
So, should brands keep schtum until their own house is in perfect order? Obviously, making unsubstantiated claims is unwise (not to say unethical). But kicking off a conversation is part of the process of effecting change – and something that the marketing might of brands makes them uniquely placed to do. U.S. retailer Walmart has gone further than most with its pledge to invest $500m over five years to support pro-inclusion charities. Another is to have minority groups front public messaging, preferably from within the brand’s own workforce – an example of employing “cultural intelligence”, as U.S. diversity expert Cassandra Blackburn puts it. Facebook’s investment of $25m to encourage Black creators to support the Black community on its platforms is an example. TikTok’s Black “trailblazers” initiative emerges from a similar rationale.
What is true for race is true for other aspects of the inclusion agenda. The recently published Gender Diversity Index 2020, for instance, finds only 42 out of 668 large European, publicly owned corporations are headed by women. As for female board members, the proportion is still in single figures (9%) ‒ far short of the 40% aspiration set by the European Commission way back in 2012. A similarly chequered trend is evident in LGBTQ+ issues, as evidenced by the immense variation between firms that participated in the most recently U.S.-based Corporate Equality Index (whose policies rate as 92% inclusive) and their peers who chose not to (26%).
Whittling down on waste
Think “packaging” and the words "hip" or "happening" hardly jump to mind. Yet, such is the pressure on brands to whittle down on waste that a mini revolution in wrapping is underway. Recent weeks have witnessed a spate of innovations, from Alibaba and Unilever deploying AI-enabled public recycling machines in China through to new 100% recyclable glass bottles for both Carlsberg Marston’s Brewing Company (also 100% biofuel) and Pernod Ricard’s 200-year-old Beefeater Gin brand.
Nigeria, which discharged around 200,000 tonnes of plastic waste into the ocean in 2018 (a figure that is projected to more than double by next year), is pledging to develop a national plastic action partnership in collaboration with the World Economic Forum, following moves already under way in Ghana, Indonesia and Vietnam. Meantime, UK retailer Tesco hit its target of removing one billion pieces of plastic, an achievement helped in part by its banning of plastic-wrapped multipacks. Going forward, Innovate UK, the government-led innovation accelerator, has promised to put £16m in the pot for smart, sustainable packaging solutions.
A recent study by the Chartered Institute of Marketing says 85% of British consumers believe brands have a packaging problem. Three of the biggest by volume, Coca-Cola, PepsiCo and Nestlé, have topped Greenpeace’s plastic pollution list each year since 2018. For its part, Coca-Cola has been making a huge play of its re-engineered, eco-friendly bottles over recent years. Only last week, the beverage giant said it would be trialling a new paper-based bottle in Europe. The move follows a decision in the U.S. to start rolling out 100% recycled bottles for selected brands. Greenpeace’s verdict? “Not … nearly enough.” The environmental campaign group wants Coca-Cola to set out a credible plan for discontinuing fossil fuel-based plastics across the board. Walmart is also in its sights. The U.S. supermarket chain is currently the subject of a legal complaint filed in California’s Superior Court by Greenpeace, which maintains that marketing its private-labelled plastic products as recyclable is “false, misleading, and likely to deceive members of the public”.
If the wrapping revolution is to progress (as well it must), then brands need to catch up with consumers and get smart. For starters, that means no more gimmicks. If your innovations deliver eco-benefit, then great – but get it audited and authenticated before plastering it on your products. Packaging manufacturer Amcor’s recent request to the Carbon Trust to validate its products with the trust’s low-carbon label is a case in point. (Note: it’s not just consumers on the look-out; regulators are clamping down on questionable claims as well).
Second, it means seeing the bigger picture. Zero-waste packaging is a systems-wide game. That requires guidelines everyone can get behind (see the Ellen MacArthur Foundation’s new circular economy policy goals) and standards they can stick to (like the newly-launched Plastic Waste Reduction Standard). Brand efforts to advance a waste-free ecosystem may not win headlines, but it’s where the revolution’s real battlelines lie. Take IBM. The U.S. tech services firm recently unveiled a free, cloud-based service, where data on key waste issues – plastic use, collection, leakage, recycling – can be securely collated and openly shared.
Net Zero: in vogue, but on course?
The spate of net-zero commitments is showing no signs of slowing. A quick look at the latest batch to make pledges or clarify their implementation strategies demonstrates a huge variety in approach and ambition. Bank of America, for instance, claims to already be “carbon-neutral” in its own operations, but to align itself more fully with the Paris Agreement (and reduce its current offset costs), it has released a series of interim 2030 targets, including purchasing 100% zero-carbon electricity by the end of the decade. Global accountancy firm EY, meanwhile, has promised to hit net-zero by 2025 (reducing its total emissions by 40% in the meantime). For its part, UK supermarket chain Sainsbury’s has given 2040 for its net-zero target date (for its scope 1 and 2 emissions). Last, but not least, oil giant Shell has tied itself to a 2050 deadline, with a strong preference for carbon capture and storage over reducing its consumption of fossil fuels ((See Just how far apart are Shell and ExxonMobil on climate?).
Other emerging trends are the number of sector-based plans for a net-zero future emerging, with Europe’s aviation sector and the UK hospitality industry the latest in line. The net-zero agenda is also spreading its wings geographically, expanding from its strong base in Europe and North America to the likes of telecoms firm MTN in South Africa, Indian automaker Tata Motors (albeit on behalf of its UK subsidiary Jaguar Land Rover), and Singapore-based real estate conglomerate CDL. By October last year, the combined revenue of corporations with net-zero pledges in place had already exceeded half the U.S. gross domestic product￼
The recent flurry is echoed in the Science Based Targets Initiative's (SBTi) , which reveals that “hundreds” of companies (current figure: 403) have so far committed to go net-zero through its Business Ambition for 1.5C campaign. Likewise, the UN-backed Race to Zero campaign is gathering momentum in its run-up to the UN climate summit in December, with (to date) 1,397 businesses and 74 large-scale investors signed up.
The momentum engendered by net-zero is welcome, but as we reported in the December issue of The Ethical Corporation (See Giving nature its due place in the race), the whole agenda lingers in the realms of the Wild West at the moment. A critical reason is SBTi’s lack of guidance on corporate strategies for reducing scope 3 emissions (namely, the impact of their products during their use phase), which account for about 80% of most companies’ carbon footprint. In a move towards clearer rules, SBTi currently has an open consultation to create a new global net-zero carbon standard. The hope is that that standard, which will include rules for offsets, will be ready in time for COP26 later this year.
The World Economic Forum (together with McKinsey) recently weighed into the debate over the role of offsets in net-zero strategies with a consultation of its own. In uncharacteristically direct terms, the influential multi-stakeholder body argues that it is time to “put differences aside” and engage in resolutions at a pragmatic level “instead of the persistent debates”. In an associated opinion piece, WEF points out that natural climate solutions now represent 40% of all carbon credits (up from 5% in 2010).
Microsoft, for instance, used its first ever combined sustainability report to reveal its increase in nature-based carbon credit purchases, a move facilitated by its partnership with carbon removal marketplace platform Puro.earth. Similarly, Ingka (IKEA’s retail arm) has recently invested in a substantial high-value forest in the U.S. state of Georgia, while (back in December) oil giant BP bought a majority stake in forest-based offset developer Finite Carbon.
Meanwhile, luxury fashion house Kering has invested an undisclosed amount in a Regenerative Fund for Nature to transform one million hectares of farmland by 2025. Similarly, Anglian Water revealed plans to invest £300m in river restoration projects and other nature-based schemes.
Net-zero may be in vogue right now but if it the above all reads like double Dutch, then a new online resource from energy consultancy BiU is well worth a peek. Equipped with a “net-zero calculator”, the free Project Net Zero website provides a tailored roadmap for companies that are new to the theme.
This article appeared in the February 2021 issue of the Sustainable Business Review. See also:
Black History Month diversity and inclusion Ken Frazier Uber packaging plastics coca-cola net=zero Carbon offsetting WEF