As they endeavour to meet lofty sustainability goals, companies from Japan's Asahi to retailer John Lewis face challenges like confusion among suppliers, tough legislation, and friction with top management over costs, executives have 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."
Best 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."
