Initiatives From The Franchise Industry To Prioritize Sustainability
Even in a year that was commandeered by a global pandemic, sustainability efforts have grown exponentially in their frequency and scope to apply to a much wider array of environmental...
Even in a year that was commandeered by a global pandemic, sustainability efforts have grown exponentially in their frequency and scope to apply to a much wider array of environmental and social issues. New industries are finding they cannot avoid this responsibility any longer as increased transparency places them under a greater level of scrutiny.
Political leaders have reiterated a sense of urgency for businesses within many industries to improve their sustainability practices. However, many companies are moving too slowly, with an incremental approach to a problem that requires a radical reshaping rather than a slight adjustment.
That is why it is hopeful to see the efforts of companies within the franchise industry, such as McDonalds and Pure Green Franchise, as it wakes up their competitors to the fact that sustainability should not only be interesting because it could be financially beneficial for them, but because it is necessary for us all to engage in such practices if we wish to enjoy sensible and safe exploitation of resources.
According to Statista, the following are the largest sustainability initiatives:
- Global leading sustainable corporation: Schneider Electric SE (NASDAQ:SBGSY)
- Leading U.S. green power consuming company: Google (NASDAQ:GOOGL)
- Leading U.S. retailer by green power: Walmart (NASDAQ:WMT)
Growth of Sustainability Efforts
What Is Sustainability?
Sustainability is an invaluable metric for the global and local strategies of all major businesses designed to protect the environment and human survival from processes that are detrimental to both. Sustainability is often alluded to with efforts such as the protection of ecosystems and renewable resource use, which is part of the picture, but also leaves out the important aspects of economic development and social equity.
Put simply, there are three pillars to sustainability: environmental, economic and social. This understanding of the word gained eminence after the United Nations 1987 Brundtland Commission Report that coalesced the ideas of economic development and the protection of social and environmental balance.
Given that the environment is usually the price of economic growth and the world’s resources are finite, they must utilize sustainably if we are to continue to support our population’s resources. Sustainability as a concept aids regulators in adapting strategies that are conducive for economic growth without the exploitation of natural resources.
In 2015, the United Nations created the Agenda for Sustainable Development, which contained 17 sustainable goals for its member states to adopt and commit themselves to. These goals outlined the challenges humans face around the world and hoped to achieve a sustainable future for all.
Popularity of Sustainable Consumerism
As consumers become increasingly conscious of how they spend their money and aim to use it in a manner that is reflective of their ecological beliefs, sustainability is a quality that will be progressively demanded of companies across all industries. Whilst sustainability is only picking up mainstream attention now, it’s the future of how the world must do business.
There is expected to be an upcoming ‘sustainable revolution’ that will be of a similar scale to the digital revolution that occurred before it. The scale of the task is disconcerting, and yet companies today are, for the most part, responding inadequately. Hiring an expert in sustainability to merely guide them through the process will not cut it; sustainability demands a full reshape of how businesses conduct themselves.
The popularity of sustainability will only increase from its current position. Since consumer preferences will directly influence the products that succeed (and are thus produced) in the long-run through the invisible hand of the market, businesses will find that they can either accept sustainability into their processes or be left behind.
Moreover, a positive feedback loop will be established that will further increase the prominence of sustainability. Since two of the top three reasons for not adopting a sustainable lifestyle by consumers are the idea that it is too expensive and misinformation, these will both resolve themselves as more businesses accept sustainability.
This is because businesses will respond to consumer interest in sustainability, leading to an increase in supply of sustainable goods, and thus a reduction in their cost and further adoption by consumers, leading again to greater production by businesses, and so on and so forth.
Sustainability Initiatives in the Franchise Industry
McDonald's Corp (NYSE:MCD) is one of the largest franchises to take a stand for sustainability, especially in the holistic, complete reshaping manner that was referred to earlier as being required. It has done this with a multi-frontal approach towards sustainability; with plans for climate action, packaging and waste, agriculture and beef, forest conservation and water protection.
They were the first global company to set a target to reduce emissions in their supply chain based on a science-based target. The franchise hopes to have prevented around 150 million tons of greenhouse gas emissions by 2030; this equates to about 32 million passengers cars not driving for an entire year.
Their investments throughout 2019 into renewable energy will prevent 700,000 tons of carbon emissions per year in the US, which is comparable to planting 11 million new trees and unveiled the first restaurant ever capable of creating enough renewable energy on-site to cover all its energy needs.
McDonalds is also testing new solutions for packaging and recycling around the globe that incorporate more sustainable materials and make recycling easier for customers. They estimate that they are over 78% of the way towards their goal of sourcing packaging from purely certified renewable sources, and are partnering to make sure these changes take place at scale. Such as with NextGen Consortium and Loop for cups.
The Chief Supply Chain and Sustainability Officer of McDonald’s, Francesca DeBiase, stated that whilst “their size and reach give [them] a platform for change, meaningful progress really comes down to teamwork … [within] the McDonald’s supply chain - and the broader marketplace”.
Pure Green is another major company with large-scale initiatives for sustainability. It is a juice bar franchise that has been growing rapidly over the course of the last ten years whose growth has only been accelerated by COVID-19. One of their key sustainability initiatives is centered on reducing their carbon footprint by partnering with local farmers and suppliers not only to connect their guests with real, wholesale and freshly sourced superfoods, but also to streamline production as well as to limit greenhouse gas emission.
In order to remain consistent with its mission of inspiring healthier communities, Pure Green builds out their stores using sustainable materials. Pure Green uses Baltic Birch wood as a core material in their standard build. Birch plywood is a sustainable, long term choice that has little impact on the global environment. Birch trees are an abundant and fast-growing species that causes little devastation or destruction of biodiversity when cut down.
Another initiative of theirs is using imperfect products for their cold pressed juice and shots. According to Ross Franklin, Founder and CEO of Pure Green Franklin: “More than one third of the fruit and vegetables we used for our products include imperfect produce. The shift saved over one million pounds of produce that may have ended up in a landfill. Our practices for sustainability and completely in alignment with our mission of building healthier communities around the globe.”
Pret a Manger
Pret has been very vocal about the value it places on ‘doing the right thing’, so much so that the company is almost synonymous with sustainability. It’s no surprise that the seriousness with which they take sustainability extends from their recipes and packaging to their shops and supply chain. They have many initiatives and are at the forefront of this movement.
Since setting up their ‘Pret Coffee Fund’ in 2014, Pret has worked directly with Cenfrocafe Cooperative in Peru to curate a course tailored to teach, inspire and help the next generation of coffee farmers to build a sustainable business through coffee. A group of 65 young farmers from across the region are inducted on to this course a year.
Over its year-long duration, the course educates these farmers on new approaches, ideas and practical training to improve yield and quality, as well as how to grow a business. So far, 326 students have completed the course, and 60 are enrolled for the sixth year. 94% remained in coffee farming, 50 of which went on to secure additional employment within the sector.
Youth membership at Cenfrocafe increased twofold, from 181 at the course’s inception in 2014 to 405 young members in 2019. Yields on the plots owned by young farmers enrolled on the course now sit at 32.77qq/ha, which is far above the region’s average of 188qq/ha.
Pret’s CEO, Pano Christou, lamented that “while 2020 will sadly be remembered for the impact of the pandemic, [they] are nonetheless determined to make sure Pret emerges a stronger, better, and more sustainable business in the future … that continues to challenge [themselves], innovating and collaborating with others”.
However franchises may feel about it, sustainability is the certain future of how the world must do business. Whilst COVID-19 has accelerated the scope of sustainable business to almost all industries, many are not treating it with the urgency it deserves and are thus implementing these processes far too slowly.
That being said, sustainable is growing ever more popular, which creates a positive feedback loop that cyclically nudges businesses to implement sustainable policies into their corporation in order to profit. This, in turn, lowers the cost of sustainable goods (as they are more common), which leads to their increased approval by consumers and an even greater presence of sustainability measures in business.
This can be seen taking place at the moment with industry leaders such as Pure Green Franchise and Pret a Manger spearheading this movement of sustainability in business with their sustainability initiative and Pret Coffee Funds respectively. This represents the tip of the iceberg and is only the beginning.