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How to use climate performance as a growth factor in a competitive market
The food industry is facing increasing climate demands from legislators, consumers, and retailers alike. However, the complexity of the food system and unique emissions dynamics has resulted in the rest of the business world outpacing the food and beverage sector on climate performance.
A solid strategy is obviously needed to make the complex transition that climate change demands. However, it is easier said than done. Game-changing players in the food industry, like Oatly and Tesco, are leading the pack and use climate performance as a growth factor in a competitive market. What have they done differently? Climate-leading food companies work with their performance systematically, realistically and create a foundation that scales. They know where to start and discover where to go next.
So, how far along the climate journey has your company come? CarbonCloud has created a framework and climate performance self-assessment with the guide 8 Tracks to Win the Race to Net-Zero so you can get started with the simplified climate maturity quiz below.
Scoring system: a) 0 points. b) 1 point. c) 2 points. d) 3 points. e) 4 points.
1. Which options best represent your organization’s climate targets?
a) We do not have climate targets
b) Our targets are long-term covering scope 1 and 2 (after 2030)
c) Short term targets covering scope 1 and 2 (within the next 5 years)
d) Both long- and short-term targets relative to a known baseline.
e) Reduction targets on a company, product, and supply chain level (Scope 1, 2, 3)
2. What do your organization’s climate assessments include?
a) We don’t assess our climate performance
b) Company emissions (Scope 1, 2)
c) Company emissions and product emissions
d) Company emissions, product, and supply chain emissions (Scope 1, 2, 3)
e) Company emissions, product, and supply chain emissions (Scope 1, 2, 3) calculated with the same system boundaries
3. How often do you review your climate performance against your KPIs
a) We don’t have climate performance KPIs
b) We have assessed our performance once
d) Every six months
4. Which option best represents your climate performance improvement initiatives?
a) We don’t have climate performance initiatives
b) Offsetting our company’s emissions
c) Switching to renewable electricity across our operations
d) New product development with optimized climate performance
e) Supply chain/Ingredient supplier optimization based on climate performance
5. Who manages climate performance (KPIs, budget, reduction initiatives) in your organization?
a) No one is explicitly managing it
c) Procurement/Supply chain/R&D
e) Chief Climate Performance Officer (CCPO)
6. How does your organization assess climate performance?
a) We don’t assess our climate performance
b) Manual life cycle assessments done by specialists or consultants
c) In a platform for parts of our portfolio
d) Automatically in a platform for our entire portfolio
e) Automatically in a platform for our entire supply chain with primary data
7. How is your supply chain integrated in your climate performance assessment?
a) The supply chain is not included
b) Manual data from the suppliers’ assessment
c) The supply chain is fully modeled digitally with representative benchmark data
d) The supply chain is fully modeled digitally with primary data from selected suppliers in the same platform
e) The supply chain is fully modeled digitally and updated automatically with data from all suppliers using the same platform
8. How do you communicate climate performance to your stakeholders and consumers?
a) We don’t communicate our climate performance
b) With qualitative statements (traffic light labels, certifications, carbon neutral) including other sustainability efforts
c) In a quantitative manner (in CO2e) with verified numbers for selected aspects (company level, few products, etc.)
d) Quantitatively for our entire portfolio with up-to-date and verified numbers
e) Quantified emissions for our entire portfolio, reduction initiatives and supply chain transparency – all done automatically
9. How does your budget for offsetting look in proportion with the budget of emissions reductions?
a) We don’t have either/one of these budgets
b) The offsetting budget is larger than the emissions reduction budget
c) The offsetting budget is on par with the emissions reduction budget
d) The offsetting budget is smaller than the emissions reduction budget
e) We don’t have an offsetting budget anymore – it is all redirected to emissions reductions
10. Which departments are operationally engaged with climate performance?
a) No department is operationally involved
b) Sustainability, marketing, legal
c) Senior management has committed, operations fall within sustainability and/or marketing
d) Most departments have climate KPIs. Climate performance is included in selected onboarding processes
e) All departments have climate KPIs. Climate performance is part of onboarding and department goals and initiatives
0-9: Time to get started Your organization needs to take the first step towards better climate performance – realizing that it is a business-critical issue.
How can I level up? Start having the conversation and start gathering the most basic data. What is the footprint of the company and its products? How much of your emissions come from your own operations and suppliers respectively. Having the data is critical to get sorely needed insights.
10-17: Problem aware Your organization has taken the most critical decision towards success: To engage your climate performance. Your organization also understands the vitality of the “or else”. The questions of “What do we do?” and “How do we do it?” drives the search for long-term, applicable solutions. Your organization is prepared to enter a phase of structural change and is communicating the commitment towards better climate performance as a branding tactic.
How can I level up? Start small with data quality and calculate your emissions baseline, consistently and digitally in a system ready to scale with you. Identify your hotspots and set short- and long-term goals. Build your roadmap on your baseline and your hotspots and map out the resources needed for its long-term implementation. Commit to increasing your climate performance data definition and to gradually engage your suppliers when you level up.
18-24: Solution aware Your organization has the theory right and knows what needs to be done on a higher level. The knowledge level on climate strategy in your organization is no longer shaped by popular narratives but insights into your climate performance. You may be at the beginning of your journey, but you are certainly on the right track.
How can I level up? With specificity and consistency. Break down everything related to climate performance into numbers and keep regular track of it. Your C-Suite needs to buy in into the necessity of a climate roadmap, take the responsibility and delegate the resources and responsibilities throughout your organization. Centralize and scale up your climate intelligence and turn the insights into actions. If you are still offsetting, focus on proven offsetting measures like direct air capture and separate offsetting reporting from emissions reporting.
25-34: Mobilizer Your organization has a strong, actionable foundation on climate performance and a few years of experience acting on it. Top management is well aware of climate targets and the strategy and are actively prioritizing it. Most departments of your organization have climate KPIs, and a budget allocated for climate initiatives and are actively working towards it.
How can I level up? Scale your actions across your organization and across your supply chain. Set targets and initiatives to get your suppliers on board and start reshaping your supply chain operations with climate performance criteria on par with financial and quality criteria. Incentivize both suppliers and employees and engage in legislative discussions about corporate emissions disclosure and measures.
35-40: Optimizer In your organization, climate performance is viewed on par with financial performance. Climate KPIs and initiatives are a core part of your operations and strategic planning and your portfolio is climate-smart across the board. Climate performance data is centralized, updated automatically and within reach for the entire organization. Your suppliers are engaged and their data feeds into your climate intelligence automatically. Your organization, all departments and management, report on climate KPIs quarterly and are evaluated on them.
How can I level up? You are miles ahead of your industry but there is always more to be done with the climate. Ensure that your data infrastructure scales as you need it to and finalize any climate data integration projects. Your biggest contribution and addition of value at this pinnacle stage of working with climate performance is to influence your ecosystem and landscape and make data-driven climate performance the norm for everyone.
To do the full self-assessment, download 8 Tracks to Win the Race to Net-Zero.