The role of data and technology in driving CPG’s sustainability initiatives

By Brian Cluster, Director Industry Strategy- CPG & Retail at Stibo Systems

A lot has changed over the last couple of years, particularly when it comes to the way consumers live, shop and what they care about. The pandemic has driven an increase in digital approaches to shopping, with purpose-driven buying more important than ever before. Similarly, the interest in sustainability-focused commerce has increased among consumers globally, especially since COP26 in November.

In a nutshell, consumers have realised that their choices can contribute to change. And because of this, consumer packaged goods (CPG) companies are realising the need to accelerate their sustainability strategies and provide data transparency around sustainability goal achievement to their stakeholders.

With this in mind, CPGs need to be more consumer centric, gather more data intelligently, and operate with an integrated approach to sustainability and digital commerce. Technology also needs to be integrated, and data needs to be governed and transparent from end to end.

So, how can CPGs adopt technology to elevate their sustainability efforts?

Making an impact

There’s no doubt that retailers are more visible to consumers in their sustainability operations than CPG companies. However, this doesn’t mean that CPG’s efforts aren’t impactful. While the majority of CPG companies have already made sustainability changes (such as recycled packaging and becoming more energy efficient) making bigger commitments that are relevant and important to the customer base will enhance the impact they are making on a broader scale.

For example, those who have partnered with local organisations on sustainable community impact programs and have aligned themselves with the United Nations Sustainable Development Goals (SDGs) are making huge strides in the right direction. But what else can CPG organisations do? Other example initiatives include:

• Define a long-term set of ESG goals that ties into your brand ethos. For example, if you work in the beverage sector, focus on reducing plastic long-term, if you work in the coffee industry, focus on supporting organic and fair-trade harvesting.
• Align corporate strategies with your key goals. This includes building loyalty among younger generations and making brands more purposeful for existing customers.
• Partner with your ecosystem and accelerate your common goals. By understanding what is important to your consumers, employees, retail partners, suppliers, communities, and associations, you can make sure you deliver value to your key stakeholders.
• Be transparent and measure your initiatives. Measure your efforts against data-specific KPIs tied to the original goals. You can therefore transparently share them with partners, employees, and consumers.
• And finally, bring together your sustainability goals and your digital strategy. This is something we will explore more in the following section.

The role of data 

Being sustainable doesn’t have to come at the expense of innovation. In fact, becoming more consumer and sustainability-centric means investing in technology and focusing on data.

Typically, when it comes to CPGs with multiple offices, brands and departments separated, governance is done individually or in small departments. However, it is not often managed, visible or measurable on a global scale. If applied correctly, data governance can establish accountabilities and enhance overall quality and depth of data.

Data governance is therefore a key element of digital transformation and, furthermore, in establishing new data standards for sustainable business operations and product development. With the right master data management, incomplete and non-compliant master data records won’t gain approval, which prevents inaccurate and low-quality information from reaching third parties.

With better managed master data, CPGs will gain increased transparency within each of their data domains and will be able to have a single view of all their suppliers across their organisation. This will ultimately enable trust and transparency about suppliers’ ownership, operations, contact information, manufacturing processes and other qualities that are important to the business.

Sustainability data covers many aspects of business, including supplier data, asset data, location data, B2B customer data and much more. Embracing technology and data management empowers CPGs to understand the connection points between the data domains in order to generate richer analytics and synergies, and avoid inaccurate data being shared. With this in place, businesses can then adopt a 360° approach to sustainability.