Sustainability Will Impact CPG Industry

Report suggests climate change will force firms to rethink business models and transform in five years.

December 01, 2022

CHICAGO—NielsenIQ’s newly released "The Changing Climate of Sustainability" report focuses on the impact of climate change on the consumer-packaged goods industry. 

Over the next five years, the report suggests that two rapidly emerging drivers of change, governance and cost will lead manufacturers, brands and retailers to transform and commit to sustainable business models to mitigate short- and long-term risk.  

"Sustainability has been on the corporate agenda for some time, as a slow burn priority where some businesses have made proactive decisions to get ahead of the pack and others have taken a wait and see approach," says Regan Leggett, foresight leader at NielsenIQ. "Exploding energy costs, crop failures and supply chain disruption are all forcing companies to future-proof existing business models or bear uncertainty and increased cost implications."   

Amid supply chain challenges, inflationary pressures and cautious consumer spending intentions, the report suggests that consumers are more informed about sustainability and demand corporate action and accountability. The new report addressed key areas, including:

  1. How exploding costs are upending existing business models due to the impact of climate change.   
  2. How escalating governance and regulation is driving sustainability momentum.  
  3. How consumer sentiment is changing from a nice to have, to a new foundational baseline in their decision making.   
  4. What role do different stakeholders play in pushing the sustainability agenda ahead? Who do consumers trust? And what ways can companies help consumers make more sustainable choices?
  5. What does the future of sustainability look like for retailers, brands, consumers and the government? 
  6. What actions must companies start now to meet future targets and pledges made by governments?   

"Consumers want help to live and consume sustainably; however, not all corporations have sustainable practices," said Nicole Corbett, vice president of thought leadership at NielsenIQ. "Over the past decade, consumers have been calling for a green revolution that has not materialized, and greenwashing and inaction from brands and retailers has left consumers with varying levels of trust in these parties to deliver."  

NACS houses helpful sustainability-related resources online under the Sustainability Playbook, where retailers can scour information related to ESG, packaging, alternative fuels and energy saving opportunities.