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Cost of sustainable change presents a barrier for businesses, IADSA survey reveals

Article-Cost of sustainable change presents a barrier for businesses, IADSA survey reveals

© AdobeStock/witsarut IADSA survey: Cost of sustainability is a barrier for businesses
More than half of respondents to a global survey assessing how prepared the supplement sector is with regards to environmental sustainability say the issue is of high relevance to their company.

But many said the costs associated with sustainable change, coupled with a lack of government support, were holding them back from doing more.

Simon Pettmann, executive director at the International Alliance of Dietary/Food Supplements Associations (IADSA), which conducted the survey, said it was intended to establish a global benchmark”.

He told Vitafoods Insights: This is about the global picture. This is about us all making sure that as a sector, we are properly engaged in sustainability and doing what we can, within the resources available, to keep making progress.”

How relevant is environmental sustainability?

The survey, which was conducted by IPSOS on behalf of IADSA, targeted companies and member associations in more than 25 countries around the world; 335 took part.

More than half (56%) of respondents said environmental sustainability was already of high relevance to their company; 17% said the issue would become more relevant over the next one or two years, and 18% said it would become relevant in the medium to longer term.

However, responses uncovered differences between the approaches of multinational corporations (MNCs) and small- and medium-sized enterprises (SMEs).

MNCs were more likely than SMEs to identify investor expectations and pressure from employees as important driving factors for sustainability: 74% of MNCs said investor expectations were very or fairly important”, compared with 49% of SMEs, while 73% said the same of pressure from employees, versus 59% of SMEs.

MNCs were also more likely to identify compliance with regulations and legislation (67% vs. 49%) and supply chain preparedness (42% vs. 27%) as very important factors.

“We know that many of the larger companies have been addressing sustainability for years – some for decades,” said Pettman. “But we also know that, for many SMEs, it's a new issue.”

Cost most common barrier to sustainable change

Asked what, if anything, was holding their company back from focusing, or doing more, on environmental sustainability, almost half of respondents mentioned the cost to the consumer (48%), while a similar proportion cited the cost to the company itself (44%). Around one-third mention a lack of government support or incentives (34%).

More MNCs than SMEs pointed to the cost of sustainability actions to the end consumer as a factor holding their business back – 55% compared with 37%.

© AdobeStock/zinkevych Cost of sustainability is a barrier for businesses

This echoed the findings of a Vitafoods Insights survey conducted earlier this year, which found that 84% of European nutraceutical industry players are in favour of governments establishing a minimum legal standard for corporate sustainability and due diligence, with 76% saying companies should be penalised for non-compliance.  

But while there was broad agreement that sustainable values should be core to business operations, the question of who should shoulder the cost was somewhat trickier.

More than half (58%) of the Vitafoods Insights survey respondents agreed that nutraceutical companies should do business in a more environmentally sustainable way, and that they should be prepared to accept a reduction in profits to achieve this.

However, most participants also said they wanted to see consumers shoulder responsibility for increased costs. Almost four in 10 (39%) strongly agreed that consumers should buy food supplements and nutraceuticals produced in an environmentally sustainable way and be prepared to spend more money on such products, with more than a quarter (27%) somewhat agreeing with this statement, the Vitafoods Insights survey revealed. Just 9% strongly disagreed, while 12% somewhat disagreed.

Nutrition a ‘missing link in the sustainability agenda

The IADSA survey reflected a range of goals in businesses’ sustainability objectives. The most widespread practices cited were employing responsible marketing and labelling (86%); ensuring food supplements contribute to healthy and sustainable diets (86%); preventing negative impacts of the production chain on the environment (84%); minimising food and packaging waste (84%); and working towards responsible sourcing in the supply chain (81%).

However, Pettmann highlighted that sustainability was about people as well as the planet, pointing to the nutrition targets within the UN’s sustainable development goals (SDGs).

“[Fewer and fewer] people can afford to have a healthy diet,” he said. “What can be done about that? Do we have a role as a supplement sector? How can we work with government to achieve these targets that have been set to 2030? That's a whole other piece of it.

Indeed, a Chatham House report entitled “The Business Case for Investment in Nutrition” described adequate nutrition as the missing link for sustainable growth.

Tackling malnutrition would bring benefits for many aspects of the sustainable development agenda, from poverty reduction to gender equality,” it read, adding: For enlightened investors and companies, the potential for improved nutrition – both in the workforce and in the communities in which firms are embedded – to drive inclusive and sustainable growth should be a compelling impetus for investment.”

Pettman said he hoped that the IADSA survey would build awareness at all levels.

He added: We are raising awareness we're helping, in a way, the United Nations and other bodies to do that [W]e give them a chance and we give our associations a chance to get this on the agenda.