With sustainability – both environmental and social – embedding itself into the day-to-day operations of retailers and consumer goods firms, corporate transparency and accountability is increasingly in the spotlight.
As an organisation that brings together industry leaders from retail and CPG, The Consumer Goods Forum (CGF) has played an important role in fostering collaboration and action when it comes to tackling issues related to sustainability, as firms face up to the challenges in their supply chains.
Such is the growing importance of this topic, that Didier Bergeret, sustainability director at the CGF, is understandably kept busy, heading up three of the Forum's Coalitions of Action – the Forest Positive Coalition, Human Rights Coalition, and Sustainable Supply Chain Initiative – each of which are committed to driving positive change.
At The Consumer Goods Forum Global Summit in Chicago, ESM editor Stephen Wynne-Jones caught up with him.
ESM: Within The Consumer Goods Forum, you are responsible for three Coalitions of Action – Forest Positive, Human Rights, and Sustainable Supply Chain, What sort of crossover is there between these?
Didier Bergeret: Not as much as we have hoped, but it's coming. Within companies, different people tend to manage these different issues. We are helping them to connect with each other.
We need to influence the efficient way businesses work and try to define what guidance, what policies, and what things can we do to ensure a forest positive future, as well as human rights and environmental due diligence. All of these are areas that are seeing increased regulation.
Since the CGF established its Coalitions of Action template in 2020, some coalitions have shown rapid progress, while others have found it more challenging. What's worked in terms of the Forest Positive, Human Rights, and Sustainable Supply Chain coalitions, and what hasn't?
I think progress is happening everywhere; it's just the visibility of what we would consider progress differs from various coalitions.
If you take the Plastic Waste Coalition, the establishment of the Golden Design Rules for packaging is a concrete step and it tells us what we need to do to make less plastic, better plastic, and recycle it better as well.
On human rights, we are looking at endemic issues that need systemic changes, and that need to go through processes and the establishment of management systems that take time. These are not always that visible within a company but help to alter, in a positive way, the DNA of business operations.
So, you may not see it, but in the end, you will embrace it, and it's not going to hurt.
If you remember how quality management systems worked back in the 90s, everybody had to write policies and processes for everything just to guarantee quality. Now, nobody questions the relevance of quality management systems, they are fully integrated into our ways of managing our operations, businesses, and relations.
On human rights and environmental due diligence, this is exactly the point we're trying to achieve. It's not sexy, I agree. But sexy doesn't mean efficient.
We are efficiently changing the way we do things, so that important issues such as a forest-positive future and human rights due diligence become core elements of the way we do business and the way we manage them.
In other coalitions, there's a clear 'North Star', like the goal to keep global temperatures below 1.5 degrees. In Human Rights and Sustainable Supply Chain, though, it's more decentralised. That presents a challenge, right?
Yes, initiatives like the Golden Design Rules can be a shining light, but at the same time, if the light is not switched on, and not implemented, you're going to fall short in terms of meeting your objectives. You need to define the roadmap to success.
For us, the roadmap to forest positive includes the commodity roadmaps, their implementation, and the reporting from our members against the KPIs they entail. On that, we are steadily doing a better job.
First, we all agreed on what we need to report against. Then, we addressed how we report, because the methodology pertaining to each individual company's approaches could all be good, but they were not helping in the collection methods to provide a harmonised understanding of where progress is happening or still needs to be made.
We see the tree growing, we see the leaves, but there are still things that could make it better
This is also a very humble recognition that it's a long process. The pace may be slow, or could be considered slow. It's such a huge endeavour that it requires the time to make it right.
This is the third year we have published a progress report on Forest Positive. We're going to have a fourth one. We're always contemplating additional progress, but we really need to clarify what progress looks like.
For example, we improved the reporting on key commodities for all KPI disclosures to 77%, up from 64% in 2022. Of course, we’re aiming to improve that. But can we ever reach 100%? I don’t think so.
If we had reached 100%, it probably would have meant that we had sold ourselves short. We set some KPIs with which it may have been easy to achieve 100%, but they wouldn't really signify success. This journey requires continuous improvement.
Exactly, achieving 100% is unrealistic, as the parameters are always changing. Another question – transparency, accountability, and due diligence are prerequisites in coalitions. Sharing and digging into supply chains transparently has been challenging but essential for buy-in. However, businesses are often guarded, especially when it comes to uncovering negative things in their supply chain or operations. Does this make the call for transparency and accountability a tough sell?
Well, I think we've cemented the commitment to transparency and accountability across all coalitions. Now the question is 'how', and potentially in the eyes of CEOs, the 'so what'.
Nobody questions a company’s financial reporting requirements because they are what they are and they serve a purpose. With sustainability reporting, many stakeholders expect you to have one, but they don't necessarily dive into it because it's laden with numerous KPIs, GRI standards, and whatnot. Sometimes, you’re not even sure if investors are reading these reports.
But at the same time, the fact that they have become so important has shaped corporate practices, which is essential.
So, it’s more about the commitment to, and the actual creation of, these reports, rather than measuring their immediate impact?
What gets measured gets managed, at some stage. It sets the compass by which you operate as a sustainable business, largely enhancing your resilience. That will depend on how you decide to report and what you decide to report against.
Especially in terms of commodities, it's an acknowledgment that forest-positive commodities are resilient commodities. Ensuring stability of supply over the long term is good for business.
The hard sell is, if I uncover something sensitive or difficult, what am I supposed to do with it besides taking action and remedying it. Will I be seen as someone striving to do the right thing, or will I be seen as flawed, like every human is?
We need to change that global mindset. The better we do our job, the more we uncover, the more we find things that we don't like, especially concerning human rights abuses and deforestation, which can occur for various reasons. The more transparency we have, the better it will be.
If you look at figures like the International Labour Organization's latest estimates on modern slavery or forced labour, they may seem higher than five years ago, but it's not that conditions are worsening; it's that we're becoming better at identifying and understanding what these forms are. This knowledge can generate collective action across businesses, sectors, and with governments and stakeholders.
So, while it's difficult to admit that we need to celebrate the fact that we're learning more, and we will get to know more, transparency is the best disinfectant, to some extent. If you don't know there's a problem, you can't solve it.
It's like the pain you have when you hurt yourself — it signals you to check it out. If you didn't feel pain, you might leave the wound untreated, causing further harm.
Managing public perception is challenging from a PR perspective. How can firms communicate to consumers that sustainability is a journey, and that they have mistakes in their supply chain, especially when there's often a perception that everyone out to get them? That all the knives are drawn?
Ultimately, what we focus on is collective business action that enhances credibility, transparency, and the availability of information, and of course responsibility for consumers.
However, many consumers prefer not to have to assess whether a company is good. The assumption should be that you deliver. As a responsible business, you deliver products that are not made with child or forced labour, and are not linked to deforestation as commodities.
It's not always necessary for consumers to know everything that you do. Instead, they should simply enjoy a credible reputation that is backed up by the highest levels of integrity and a genuine commitment to continuous improvement.
I wouldn't expect consumers to read through CSR reports or get to know every aspect of a company’s operations to judge its credibility. Rather, I would hope that our industry would become sufficiently open and transparent about their issues, acknowledging them and sharing in their solutions, understanding that some issues are systemic and require collective interventions.
I would hope that we, as an industry, can discuss challenges openly while showcasing what good has been done, and what still remains to be done.
You mentioned the word 'good' there. Consumer goods companies often celebrate their sustainability achievements in press releases. I would argue that it's more important to maintain a balanced, respectful tone amidst ongoing challenges like deforestation – after all, you are often only scratching the surface.
I would agree with you. Humility is essential, but authenticity in the efforts you establish is key, and that can be easily measured by CEO-level engagement and support, resourcing of specific departments, activities, and concrete projects that you have. And the ability to say, 'You want to know something? I can show you'.
We have commodity managers, human rights managers, and new functions now integrated into many aspects of our business – headquarters, operations across countries and regions, covering various sectors – all highly professional.
In the end, a chief sustainability officer acts as the conductor of an orchestra, with multiple different playing their instruments, each contributing their expertise on a particular instrument, to ensure sustainable practices, address labour issues in specific commodities and geographies, manage water resources, and oversee specific utilities.
If you can showcase that you have the right people to address the right topics and the right issues, it's all for the best. This approach is increasingly vital for business resilience, and the ability to maintain operations, even if unfortunate events happen.
One of the criticisms that has been levelled at the industry, and I'm sure you encounter this within the CGF, is that some of the achievements are primarily driven by larger corporations. There's a need for greater inclusivity to involve other companies in this journey. How can smaller companies gain the confidence to pursue sustainability within their own organisations, when the examples are primarily set by industry giants?
Yes, it's been an argument I've had for years. I'll be diplomatic and say, that companies need to get more self-confidence – a belief that you can do it. But there's also a reluctance to act, with some believing that sustainability initiatives should only apply to big companies.
If you look at any given law, or the EU regulations, for instance, the thresholds they apply limit the number of companies targeted by these obligations significantly, And most of these companies already have some measures in place.
Yes, you're moving the needle by introducing these regulations, which I see as beneficial because they set a northern light or objective. However, they haven't yet fully invited the entire value chain to embrace these necessary changes.
I believe our role now is to encourage SMEs to adopt what we see as beneficial and positive changes, rather than waiting for regulations to become applicable to them. Invite them to see that these are fruitful, positive changes that can be good for business.
Sure, a smaller company might say, ‘I don't have the resources' of a multinational, but these larger companies also had to take the same journey at some stage.
Also, sometimes, large companies function in an SME-like mode, especially in operations in specific countries, where you might have unique challenges. Often it's the local operation that identifies the need, like handling plastic waste or offering fair employment practices, tailored to the market's specifics.
Legislation like the CSRD and EUDR will soon mandate actions that need to be taken. What are some early actions that can be taken to mitigate the impact of these regulations when they do come into force?
It might sound simple, but join a Coalition of Action. They weren't established to be a response to regulations, but a proactive effort to tackle issues we were well aware of, knowing that no single company could manage them alone.
Sometimes, regulations come with intent but lack a ‘how to’, or clear implementation guidelines. This is where coalitions, or industry roadmaps, play a crucial role in setting the scene. They enable businesses to strategise on how to improve practices and meet regulatory expectations.
Whether or not these regulations should be penalising in their first instance, is questionable, but we do have the ability to say 'this is how we can do it'.
The EUDR introduces complex traceability requirements. While we have some solutions, they're not yet perfect. We need constructive dialogue to let them know what businesses can do, and where they need support.
Forced labour, too, is daunting. It happens everywhere. In France, in the wine industry sometimes, in Germany in the asparagus sector – everywhere you have labour intensity, you have a risk of forced labour. Most companies have measures in place to address this.
Sometimes, forced labour emerges as a consequence of a given system, cultural practices, or established ways of working that are conducive to modern forms of slavery.
Rather than penalising businesses, if we were to say, this is actually not a 'risk' area, but a 'priority' area, committing both regulators and businesses to work together to find some solutions, wouldn't that be a better way?
There could be a carrot and stick approach. If you don't have genuine, good-faced efforts, you deserve a stick. But if you start with the stick, rather than then look at the potential of a carrot, I think you're missing a big piece of potential change that would move the needle.
I would love tomorrow to be able to sit with the EU regulators and say, 'this is what we have identified on potential priority areas'. Let's be positive. Let's be on it together, acknowledging that these are challenges, but we want to first try to solve them before you telling us that we failed at them.
With relation to the EUDR, political tensions have emerged when some countries are labeled as 'risk countries' by the EU itself, which completely disregards the decades of efforts those economies have been putting in, to regulate labour, regulate the plantations, the usage of pesticides, the deforestation intensity, et cetera.
It places them into a judgemental category, where they're 'never going to be good', Whereas, in many cases these are countries with a dedicated effort to making things right.
Let's help them first and foremost, and reward them for those efforts by putting them on a priority list rather than on a risk list.
I think that the EU's perspective on setting guidelines can be ambitious, but global economic realities complicate things. Besides, if the EU closes its doors, companies could just say ‘Okay, fine. We'll just go to Brazil or China.’ There has to be a balance. If it's black and white, as in, 'this country is bad, because of X, Y or Z’, then what are you going to do with that information? It's so negative, so counterproductive.
And have we checked our own backyard? Are we really that good? Look at deforestation in France. Everyone visits Versailles, but what was there before?
The world we live in is complex, but nothing worth doing is easy. Let's gather all the smart people in a room, get the info, and take a pragmatic, objective view to understand the problems. Let's see businesses as part of the solution rather than just the problem we need to address.
We've been engaging extensively with stakeholders who have been, for various reasons, very vocal and critical about our industry. Today, I still feel they have the right to be critical about certain things, but now they're saying, 'Here's how we can improve your forest-positive roadmaps, because these elements are missing'.
There's an implicit acknowledgment that what we've developed isn't too bad but can always be improved, which we appreciate. This has created a space for a constructive dialogue on making the world a better place for people and planet, with everyone around the table.
Facing a fair amount of constructive criticism is never a bad thing. I really sense things are changing in the right direction, and these Coalitions of Action are not just game-changers for the industry but are also significantly contributing to the Sustainable Development Goals. The clock is ticking.
