Great changes impacting usScroll down
Consumer habits are changing towards more healthy and sustainably produced foods. Stakeholders are seeking more ESG related information about our business than ever before, and international and national regulations regarding sustainability are tightening. We view these changes as an opportunity to position Scandza as a sustainable and responsible participant in the Nordic markets.
Sustainability is playing an increasingly significant role in the choices made by consumers. Price still remains a decisive factor influencing many consumers’ instore-choices, but we are seeing a growing concern surrounding environmental and social sustainability alongside this. Particular topics of interest to consumers include origin of products, nutrition, dietary requirements, mode of production, and disposal.
Data shows that high number of consumers would be willing to sacrifice convenience for healthier products (1), and Folkehelseinstituttet recognises the importance of food in our overall health and wellbeing. This focus on health is resulting in an increasing demand for plant-based products, and attention to sustainable packaging is also high.
Tighter laws and regulations
European national regulations are changing the framework conditions under which we operate. Norway, Denmark, and Sweden have all submitted their climate targets to the UN, and national strategies to cut emissions are now being developed. This will impact our business. The EU Green Deal is communicating strategies for biodiversity, emissions, transportation, circular economy, and agriculture that sets out to improve the food system of which Scandza is a part.
There are also both international and national regulatory changes underway that will expand sustainability reporting requirements. Under the EU Green Deal, the EU Taxonomy Regulation will require large companies to start to report in more granular detail on their economic activities and how they perform against science-based technical screening criteria from the EU. The Sustainable Finance Disclosure Regulation (SFDR) will require financial market participants to make firm and product-level disclosures about integration of sustainability risks, adverse sustainability impacts, the promotion of environmental or social factors, and sustainable investment objectives. In Norway, the Norwegian Transparency Act has been passed, which will require companies to carry out due diligence assessments around human rights in their value chains, and to communicate information transparently to stakeholders.
We seek to meet all regulatory requirements and monitor these developments closely through our active participation in industry membership organizations; Næringslivets Hovedorganisasjon (NHO), Svensk Livsmedelsindustri, and Dansk Industri.
Growing risk for business
In the last few years, the risks that climate change and environmental changes pose for business have become more widely acknowledged. The World Economic Forum’s latest global risks report highlights climate and environmental risks as among the most significant risks facing us in the next decade, with “extreme weather” and “climate action failure” appearing as top risks in short-, medium-and long-term outlooks (2).
Climate change and environmental degradation can pose significant risks to businesses as these are sources of structural change that can impact economic activities. These risks can impact the resilience of a company’s business model over the medium- to long-term, particularly for those working in industries that are reliant on markets which are more vulnerable to climate-related and environmental risks. For example, increasing extreme weather events, flooding, sea-level rises, water stress, and drought can have huge impacts on crop harvests and food production, leading to the disruption of supply chains. Equally, this can result in damage to physical assets or reduced productivity.
An understanding and awareness of these risks is key to beginning to mitigate and adapt to them, and is something that Scandza, as a part of the food industry, is continuously working on.
Political expectations and the financial industry’s valuation of how we manage environmental, social, and governance issues are increasing. This requires a more detailed understanding of our risks and opportunities, more granular data to document performance and support communication, as well as the implementation of sustainability into Scandza’s core strategy.
With this, comes an increasingly recognised need for greater transparency and documentation for ESG from businesses. While a high level of documentation has been required on the financial level for some time now, there has not been the same requirement for other areas, including ESG performance data.
This is something that is beginning to change as the legislative background develops, but also as an understanding of the benefits of this kind of documentation is recognised within companies and by various stakeholders. Placing ESG data on a similar level to financial data allows performance to be better documented, allows us to know if we are taking the right decisions, and enables us to track contributions to global targets and key challenges. Keeping ESG data and documentation on a more granular level, as well as increasing transparency and disclosures, allows a more nuanced and accurate understanding of our impacts on environmental, social, and governance issues.
1Ipsos Global Trends 2021 report – page 22