The spotlight shifts to B2B ESG strategy

written by Michael Pooley, 20th January 2022, in CEO Insights

The sustainability spotlight is no longer shining solely on consumer behavior. Consumers are rightly forcing the focus onto entire business models and their ESG (Environmental, Social, Governance) performance. Obviously, I’m not the only person to welcome this long-awaited shift.

As a "business to business" service provider whose products carry fresh groceries from the producer all the way to the point of sale, I see this development as an opportunity to highlight IFCO’s three-decade-long sustainability credentials. I also want to go public with our firm commitment to do even more in the future. By 2025, we want to double the environmental benefits that IFCO brings to the fresh grocery supply chain. And by 2040, we want to be a net zero carbon business.

How consumer awareness impacts B2B ESG strategy

Today’s consumers are generally more conscious about sustainability issues, which is directly affecting consumer behavior. As one recent McKinsey survey across three European countries reveals, sustainable choices are high on the agenda for most consumers, particularly when it comes to fresh produce. According to the survey, seven out of ten respondents across all age groups and incomes say they would be willing to pay more for fresh fruit and vegetables if they are sustainable.

Consumer influence goes far deeper than any individual buying habits, however. Most notably, as a more comprehensive McKinsey overview of broader sustainability issues in retailing confirms, heightened consumer awareness is increasing pressure on all types of companies to prioritize sustainable business practices and go beyond business as usual.

This shift in expectations is equally important from a B2B perspective. It is no longer sufficient to provide the right service or product at the right costs to consumers or to other businesses. Companies also need to be transparent about their sustainability credentials. However, as a large part of their environmental impact typically takes place upstream, individual companies can only go so far on their own sustainability practices. Crucially, they need to bring along their supplier base in their sustainability journey.

More specifically, they need to be clearer on what sets them apart from an ESG (Environmental, Social, Governance) point of view, irrespective of the company’s purpose, portfolio or client base.

“As a pioneer in implementing sustainable business practices, we do not follow industry standards, we want to lead”

Michael Pooley

IFCO, CEO

Sustainability: always at the heart of our business

For thirty years now, since IFCO was founded in 1992, sustainability has been at the heart of our business model. While other businesses may now be struggling to adapt to the changing consumer landscape, or need to radically change the way they produce, sell or use their products and services, we are fortunate to have an intrinsically sustainable circular economy business model. And whereas other service providers and producers are now having to reinvent themselves or overhaul their business models, we only see opportunities to strengthen ours further in the future.

The original idea for our pooling system for Reusable Packaging Containers (RPCs) was borne out of a desire to provide a more efficient, environmentally-friendly and food-safe alternative to single-use packaging for transporting fresh produce. Over the past three decades, we have continuously fine-tuned our model to successfully target food and solid waste and limit the use of natural resources. As a result, sustainability spans across the entirety of our business operations and value chain. That said, there is still more that we can do.

Taking the lead and responsibility for sustainability

As the leader in the industry, we take our ESG responsibilities and opportunities seriously. By 2025, we want to double the environmental benefits that IFCO brings to the fresh grocery supply chain, as measured using verifiable LCAs (Life Cycle Analysis). And by 2040, we want to be a net zero carbon business. We also want to make it easier for all stakeholders, producers, retailers and warehouse operators to join us in this journey.

To this end, we recently published our 2025 ESG Strategy in the IFCO ESG 2021 Report, Thriving in the circular economy. By dividing our ESG strategy into three separate pillars, we confirm our commitment to, what we believe are, the most pressing issues of the day: Thriving Business, Thriving Planet, Thriving Society.

Why you can trust our ESG strategy and report

These three pillars are the cornerstones of our ESG strategy. Each has clear, measurable, ambitious targets. Combined, they define a solid roadmap to achieving our long-term goals. I believe that by focusing and investing in ESG, we are demonstrating that our efforts and priorities match those of our customers and ultimately the consumer. The idea is that a transparent approach will also inspire others to act and rise to the challenge. Unless we do this, we risk being accused of "greenwashing".

We have therefore made the conscious decision to report according to the requirements of the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the United Nations Global Compact (UNGC) standards, and we are signing up to the Science Based Targets initiative (SBTi) , so that we can objectively track our progress towards our goals.

We strongly believe that this is the only way that our commitments can have any credibility. To make a real difference, it is essential that all businesses work to the highest of standards. Together, we can bring circular economy models to the fresh grocery supply chain and ensure the greatest positive impact.

Throughout the history of IFCO, key developments in our circular model have resulted from our own R&D and key insights from independent research, but also from the valuable input from our employees, partners and customers. In other words, we have always listened to the science, but also to the people who are closest to our operations, both inside and outside our company. It’s this input that has helped us conduct a thorough materiality assessment to determine the ESG topics that impact our business and stakeholders most. We have used such insights to define and develop a clear ESG strategy. As a pioneer in implementing sustainable business practices, we do not follow industry standards, we want to lead. We continue to build on our legacy to make the fresh grocery supply chain sustainable. I encourage you to read our report and to get back to me if you have any questions. We continue to listen to your concerns, and we will respond.

Join us in our ESG journey

Read the report

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