Nearly 64% of consumer packaged goods (CPG) brands acknowledge the importance of being environmental, sustainability and governance (ESG)-compliant, according to a new report by TraceGains.
“We applaud the willingness of brands and manufacturers to foster and uphold ethical and sustainable practices, and their commitment to ‘walk the talk' to prevent products from hitting the shelves that don’t align with ESG goals,” says Paul Bradley, senior director, product marketing. “Our report shows that even with good intentions, actually delivering on ESG promises across the business demands unwavering dedication.”
From PR Newswire:
- Despite the challenges, most food and beverage brands expressed a strong desire to embrace ESG objectives with many seeking the ability to stand behind claims to ensure that ingredients in their supply chains are properly sourced and labeled.
- Nearly half (46%) prioritize doing business with ESG-compliant ingredient suppliers.
- Key drivers for being more ESG-focused included a combination of evolving regulatory landscapes (32%), consumer demand (27%), and competitive pressures (18%).
- Half (50%) of all respondents said they’d be willing to stop production on a product altogether if it could not be produced in accordance with ESG objectives.
- 41% feel they are falling short of achieving full ESG compliance.
- Nearly half (42%) rely on informal methods to select ingredient suppliers like word-of-mouth conversations (23%) or relying solely on suppliers' claims (35%).
- Only 16% of brands use a formal, technology-assisted selection process for validating ESG partners.
- 55% demand more transparency into ingredient supply chains, with nearly half (49%) wanting visibility into Tier 2 and Tier3 suppliers.
- 42% plan to increase their usage of ESG-compliant ingredients within the next 6-12 months.
- One-third (35%) are willing to pay up to 10% more for ESG-compliant ingredients and 32% would pay up to 20% more.