TWO REASONS TO BE OPTIMISTIC ON INDUSTRY SUSTAINABILITY

It’s unfortunately true that bad news is more popular, but I want to buck the trend and start the new year to discuss two positive drivers of change in the industry. It’s something I’ve been thinking about recently – and interesting that they’re coming from unexpected quarters. Am I being naive? Let me know your thoughts in the comments.

First: Companies need to be ethical to hire the best people

It’s nothing new for companies to try to identify and hire the best employees. This was the purpose of Job Fairs in which companies would compete to convince the best candidates to work for them, while the rest of us would hope they wanted to hire us! That paradigm now, has well and truly shifted.

Too Embarrassed to Work at Facebook?

My kids are in their mid-20s and tech-savvy,  but neither of them would consider working at Facebook.  It’s not because the money isn’t good, it is, But there is now a stigma attached to working for the company.  The once-cool but brash tech startup was the place to go if you wanted to work with cutting edge technology, or science, including math, and psychology. 

Because of their widely reported privacy violations, It’s now considered a pariah for many. Some employees even don’t like to admit working at the company during social gatherings.

How Does this Relate to Big Chocolate or Coffee Companies

So what does this have to do with the chocolate or coffee industry, or the environment? 

The Generation Z (Gen Z’ers), especially those who are highly qualified, will choose where they work taking into consideration the ethical brand value of that company.

The issue for companies can be explained with a simple equation.

Low Ethical Brand Value = Low Chance of Hiring Top Talent = Lower rate of Innovation

As a Forbes article on May 2021 said “Gen Z Is Emerging As The Sustainability Generation”

Because science represents such an important competitive advantage to our industry, the big companies need to be attractive to the new intake of qualified talent who have the passion and ideas that will sustain the company’s growth. The need for food scientists in chocolate companies may be apparent, but the coffee industry also requires science and technology talent – just look at startups like Atomo, Demetria, or Cometeer (whose last funding round was $35m in Oct 2021).

Nestle, Mondelez, Barry Callebaut et al. Need to attract the brightest young talent across multiple disciplines to stay relevant and competitive. Here’s just one example from Barry Callebaut who spun off an entrepreneurial micro-brand in food tech.

“Cabosse Naturals, a brand by Barry Callebaut, was founded by a team of passionate entrepreneurs. With our startup mentality, we are committed to break new ground. With Cabosse Naturals, we craft the entire cacaofruit into 100% natural, added value ingredients.

Barry Callebaut Website

Meanwhile, Mars and others have been acquiring technology and companies that allow it to reduce sugars without losing flavour. The diabetic food industry is growing at a Compound Annual Growth Rate (CAGR) of 5.6% according to a study just released. 

If you’re young, smart and qualified, it’s a sellers-market, and you can take your pick where you work. Money is no longer the only driver, and It may not even be the main one. Generation Z’ers are just as concerned about the ethics of the company they work for, as the salary.

It’s not just in the science disciplines either, seemingly mundane jobs, such as communication or logistics are critical to these companies too (did you know that Apple’s CEO rose to his position because he was considered a logistics genius?).

For this generation, telling their friends they work for a company that makes the headlines for deforestation, trampling on indigenous rights or abusing the environment, is not an option many would even consider.

Second: Consumers Tire of Greenwashing

You’re probably familiar with the role of banks in financing dubious green projects, but now advertising companies are finding there are consequences to being associated with unsubstantiated environmental claims.

In May last year, advertising juggernaut, WPP warned shareholders that they had incurred a material reputational risk after activists campaigned against their role in perceived greenwashing of companies with the worst environmental records. 

The catchy phrase used by the environmental group was; “The climate impact of an advertising agency is the work it does in the world, not the lightbulbs it has in its offices.”

The climate impact of an advertising agency is the work it does in the world, not the lightbulbs it has in its offices.

Their campaign focused on fossil fuel companies, but it served as a wake up call for the Ad industry that they too, were accountable for their actions. Campaigners created an online F-List of advertising companies to shame those involved.

The campaigners argue that the advertising industry is doing real harm. As the F-List website put it their actions to  “slow government action by distorting climate debates”. This puts more poetically the concern I had when Cargill lobbied against the proposed deforestation act in the EU.

Cumulative, not Radical Change

Last years actions have put the sustainability question on the Advertising Boards agenda with a twist. It’s not their own sustainability they need to consider, but those of the clients they work with. The best agencies, will have the most to lose reputationally, and so it follows are the most likely to turn down companies with poor track records. Risk assessments might form part of the client engagement process. As the FT reported yesterday “An Australian campaign, Comms Declare, similarly urges communications professionals to “choose your next clients with the climate in mind”. 

choose your next clients with the climate in mind

In itself, this won’t reform a company with bad practices, but it becomes just one more reason, along with incoming legislation and numerous other initiatives, to make any company running a quasi-sustainable operation rethink their approach.