In the second part of his monthly Brand Watch column, Oliver Balch looks at the need for credibility in voluntary sustainability initiatives, the oil and gas sector's smirched report card, and Timberland's community cotton in Haiti. He also reports on the row over Ben & Jerry's stance on Israel
Industry certification schemes tread a fine line. Set the bar too high and brands complain that it’s too hard or too costly to comply. Set the bar too low and critics say the whole exercise is a farce. All the while, consumers stand in supermarket aisles, unsure if sustainability kitemarks really deliver what they say on the tin.
In this respect, the fact that the Forest Stewardship Council (FSC) booted out one of its members is all to the good. It proves the scheme has teeth. As of 16 October 2021, Indonesian timber and palm oil company Korindo will no longer be able to carry the prestigious FSC logo. The charge sheet against the company includes involvement in deforestation and human rights abuses. After years of back and forth, FSC finally decided to “disassociate” itself after the two parties failed to agree on a sufficiently independent process for verifying Korindo’s current performance (which the company insists is much improved).
More and more of such brand-led sustainability initiatives are now emerging. In the last month alone, we’ve seen major business-backed schemes from the retail industry (under the umbrella of the COP26-oriented Race to Zero campaign), the chemical sector (in the form of a new set of principles on ingredient disclosure), the asset-management community (in support of the Paris climate accord), and the trade body for concrete manufacturers (again, around net-zero and Paris targets). If such alliances are to have any credibility, then they need firm objectives and, more importantly, robust pathways for delivery. The latter includes keeping any grace period short and letting laggards know when time is up.
The hydrocarbon sector’s projected carbon footprint in 2050 will comprise 80% of the total carbon budget in a 1.5C scenario
Evidencing action is partly a question of trust. If brands promise to act, stakeholders can reasonably expect them to evidence headway. Every year spent dillydallying brings the world’s pending social and environmental crises a year closer. Hence, the understandable frustration at learning that the climate pathways set by oil and gas companies spell almost certain climate disaster. According to a new assessment of the emission trajectories of the world’s largest 100 hydrocarbon corporations, the sector’s projected carbon footprint in 2050 will comprise 80% of the total carbon budget in a 1.5C scenario.
“Opaque” and “unambitious” is how the three organisations behind the study – which comprise the World Benchmarking Alliance (WBA), CDP, and ADEME – describe the industry’s targets. Every oil major and national oil company, it should be noted, increased production between 2014-2019, seemingly at odds with energy transition goals. The study shows that question marks raised by investors earlier this year about the carbon plans of oil giants Shell, BP and ExxonMobil are generic to the sector as a whole (the climate shortfalls of their competitors, in fact, are even worse in many cases). (See also Oil and gas efforts to cut emissions ‘just smoke and mirrors’, finds new climate benchmark)
Pleading ignorance of the situation’s urgency no longer washes, warns WBA spokesperson Vicky Sins: “The industry must . . . signal the steps it is taking to meet this challenge.” (Note: in response to calls for substantive action from business more generally, the Science Based Targets initiative is now requiring companies to set decarbonisation trajectories in line with a 1.5C goal, not “well below 2C”, as previously.
More than trust, however, is the issue of progress. Brand owners aren’t stupid. They know that signing up to high-profile sustainability alliances – as the likes of Unilever, Salesforce, GSK and Microsoft have done with the UN ahead of its international climate summit this November – invites public scrutiny. Nor do brands have infinite budgets or endless pools of human resources, either. If they invest time and money in industry initiatives, it’s because they want solutions to tough challenges – solutions that they recognise are most likely to come from collective effort and pan-industry collaboration.
It may even require them stepping into tricky political waters. Unilever’s ice-cream brand Ben and Jerry had a taste of just that this month. Its decision to cease the sale of its products from the Israel-controlled Occupied Palestine Territory (which was both announced and later defended on Twitter) won praise from Palestinians but sharp criticism from Israeli authorities as well as pro-Israeli consumers around the world.
Less controversial was Timberland's announcement that its work with Haiti's Smallholder Farmers Alliance to source sustainable cotton from the Caribbean nation has born fruit. Five years later, Haitian “community cotton” can be found in a range of the U.S. brand’s new footwear lines. Nestlé’s water division is on a similar journey from industry cooperation to tangible action, recently committing $130m for water management projects for its 48 sites worldwide. The move emerges out of its involvement in the Alliance for Water Stewardship, which it joined back in 2017. Or, at a more sector-wide scale, consider the UK equity issuers that have been working closely with the London Stock Exchange to increase their sustainable products and services. Two years on, and 101 registered issuers now qualify for the Exchange’s Green Economy Mark.
The ability of the private sector to keep to its preference for voluntary action is not assured. Plastic pacts by industry may now exist in the U.S. as well as Europe, but that hasn’t stopped non-business voices demanding that governments step in (as per calls earlier this month by a group of leading scientists to ban virgin plastic after 2040). To ensure voluntarism remains valid, evidence of substantive action from industry-level sustainability efforts is essential. Otherwise, it’s not only regulators and the public who will lose interest; brands may also.