Vitafoods insights: the cost of going green

03-May-2023 - Last updated on 05-May-2023 at 07:48 GMT

The European supplements industry has expressed widespread support for government-enforced sustainability standards in a Vitafoods Survey, but it doesn’t want to shoulder the cost.

The new Vitafoods Insights Sustainability Survey 2023 has found that 84% of respondents, who were drawn from marketing, product development and innovation, consultancy, procurement, distribution, and R&D backgrounds, are in favour of a minimum legal standard for corporate sustainability and due diligence.

Additionally, 76% of participants believe that companies should be penalised for non-compliance.

The European Commission proposed a regulation in February 2022, aimed at promoting sustainability and corporate social responsibility (CSR) across global value chains as part of the EU’s efforts to become climate-neutral by 2050.

The Commission says the aim of the Corporate Sustainability Due Diligence Directive would be to “foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance”.

If imposed, to comply with the directive, companies would be required to report on sustainability accurately and comprehensively and address any negative impacts on human rights and the environment that may arise from their activities.

The EU Directive

The rules will apply to EU companies that have more than 500 employees and a net turnover of €150 million, and EU companies with more than 250 employees and a net turnover of €40 million that operate in “high impact” sectors.

The report states that high impact sectors include agriculture, forestry, fisheries, the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages.

Nutraceutical companies, including those producing vitamins and minerals, fish oils, collagen, whey protein, and probiotics, are also expected to be affected.

The report mentions Birthe van der Voort, sustainability partner at Deloitte, who told an audience at Fi Europe 2022 that the new rules were guaranteed to have a huge impact “not only on your financial reporting side... but also very much on your business, on your operations, on how you communicate and work with your suppliers in your entire value chain”.

Areas of action

The Vitafoods survey results identified reducing greenhouse gas emissions and plastic waste as key areas for action, with 44% and 21% of respondents, respectively, ranking these as the most important issues for achieving sustainability.

Protecting biodiversity was only the top action point for 8%, followed by reducing pesticide use (6%) and protecting workers’ rights (5%).

However, a majority of respondents (66%) believe that consumers should bear responsibility for the increased cost of food supplements and nutraceuticals produced in an environmentally sustainable manner.

The willingness to accept costs is lower in the nutraceutical industry than in the wider food industry, according to the survey. In comparison to a previous Fi Global Insights survey, a larger percentage of respondents agreed that companies should prioritise environmental sustainability, even if it means a reduction in profits.

Scepticism

Three-quarters of respondents said they believed that the EU Due Diligence Directive would impact their supply chains.

There was also a desire for flexibility, with 64% of participants saying companies should be allowed to define their own corporate sustainability standards.

Whilst 73% said their company already implemented such processes for sustainable business only 51% of respondents thought that their company's due diligence processes were sufficient to tackle the current climate crisis.