Sustainability doesn’t work without transparency

Originally written for CIO.com.

Do you know what your current carbon footprint is? If not, how would you go about calculating it? What information do you need?

When you’re grocery shopping, do you know the environmental impact of the products you’re buying? You probably know that meat and diary both have high greenhouse gas emission and land use impacts in general, but how would you compare with alternatives? Should you buy lamb from the UK or New Zealand? Should you pick oat, soy or almond milk instead? Are you optimising for carbon emissions or nutritional content?

The problem is that whilst all products have detailed information about their ingredients and nutritional values, the environmental impact of your purchasing decisions is unknown. It is also unknowable. Whether it is carbon emissions, water usage or energy inputs, it is impossible to know the environmental impact of food because the information is not reported.

This not unique to food – very few products provide sufficient information to be able to make accurate environmental assessments. Some industries have adopted voluntary environmental certification standards, such as the RSPO standard for sustainable palm oil or the FSC certification for paper, but they are the minority. Broader schemes like Fair Trade are also useful because they incorporate not just environmental standards but are known for their ethical credentials. But very few products are covered.

Company level reporting is starting to be adopted. Amazon was recently forced to release its 2018 carbon footprint after 9000 employees wrote an open letter criticising the lack of transparency:

We, the undersigned 8,695 Amazon employees, ask that you adopt the climate plan shareholder resolution and release a company-wide climate plan that incorporates the principles outlined in this letter.

Open letter to Jeff Bezos and the Amazon Board of Directors

Reporting standards for sustainability exist and there are voluntary schemes, such as CDP, for companies to submit environmental data in a standardised format. However, not every company participates – Amazon does not, but Google and Microsoft do.

Indeed, some technology companies are leading in how they approach environmental reporting. Apple is a good example of publishing detailed environmental reports as well as issuing report cards for every one of its products (at the bottom of the environmental page). Microsoft does the same for its Surface products (although it is not up to date with the latest 2019 line-up).

The consumer demand is there for “sustainable” products but it is currently too complex for most consumers to figure out what they should actually buy.

The current trend of pursuing a sustainable food production through critical purchase decisions rather than through regulation is shown to be problematic, as shopping for a more sustainable food system might be much harder than initially believed due to the conflicting values and inherent trade-offs entailed in the different notions of sustainability. Thus, critical consumerism may give way to false expectations as the complexity of choices transpires.

What to Buy? On the Complexity of Being a Critical Consumer, Gjerris, M., Gamborg, C. & Saxe, H. J Agric Environ Ethics (2016) 29: 81.

Unfortunately it hasn’t changed much since that study was published to 2016. New companies and startups can build environmental reporting into their culture but established organisations need to put in more effort.

Supply chains are complex and it’s not just one company that needs to report – every element of the chain must do so. However, gathering and releasing data is crucial and the larger the company is, the more leverage they have over their suppliers.

We know food labelling works (especially if it is simple) but the information needs to be available. The format – whether traffic light colours on packages or detailed numerical reporting – will be determined by who the audience is, but companies should publish all the data they have.

We already have financial reporting requirements because without them investors cannot make informed decisions. In the UK, reporting on greenhouse gas emissions has been required by all quoted companies since 2013, and reporting of global energy use since 2019. However, these are limited because they are published in aggregate. Any company that comes under the reporting requirements is likely to have more than a single product. Without the granular product level data, it isn’t particularly useful for external observers.

This might seem like overly heavy government regulation but reporting can easily be abbreviated for smaller organisations (just as financial statements are). It is better for government to force disclosure of information and then have the market develop its own approaches to analysing and comparing product options rather than having the government force product specific directives on companies. This is becoming easier with tools such as Salesforce’s Sustainability Cloud and new startups such as Emitwise. Change voluntarily or have changed forced upon you.

Why can’t environmental impact be like the price mechanism in a properly competitive market?