Food retailers now have a comprehensive set of criteria to track their sustainability performance.
The non-profit Ratio Institute has released its Food Retail Environmental, Social and Governance (ESG) Reporting Standard, a guide for companies to make specific operational changes while enhancing transparency with investors and other stakeholders.
Historically, food retailers have tracked ESG performance from various non-industry-specific reporting frameworks, such as the Climate Disclosure Project and Global Reporting Initiative, making it difficult for investors, vendors, non-governmental organizations and shoppers to assess company efforts, the Santa Cruz, Calif.-based Ratio Institute said. The new standard organizes metrics across several well-established voluntary reporting frameworks into an easy-to-implement reporting approach specific to food retail.
As a result, the institute noted, companies can set ESG targets and define strategies to achieve those objectives, while providing insights on operational improvements that increase profitability.
“Equipped with a systematic approach to grade their operations, food retailers can more easily define their baseline and identify the changes necessary for large greenhouse gas emissions and other performance gains,” according to Jonathan Tan, co-founder of Ratio Institute. “This is a huge opportunity to raise the industry’s profile as a sustainability leader. It is also a big profit opportunity for both retailers and investors. Now investors can easily compare food retail companies against best-in-class performers and make better-informed investment decisions.”
The ESG Reporting Standard defines key aspects of a high-quality ESG report and covers topics such as governance and risk management; greenhouse gas emissions; food safety; occupational health and safety; labor, human rights and diversity, equity and inclusion (DEI); and sustainable supply chain and sourcing.
Several stakeholders are already on board with Ratio Institute’s initiatives, including the Independent Grocers Alliance (IGA), FMI-The Food Industry Association (FMI) and the National Retail Federation (NRF).
“FMI members are focused on making sure that the same transparency and rigor they bring to financial reporting are brought to bear in their ESG reporting,” commented Andrew Harig, vice president of tax, trade, sustainability and policy development at FMI, based in Arlington, Va. “Ratio Institute has created a food retail-focused tool that can help with that process by offering a standardized framework for communicating the metrics, best practices, commitments and progress on ESG goals that are increasingly important to grocery’s business model.”
Regional supermarket chains Raley’s and Weis Markets also have embraced the new ESG standard.
“This is a great first step in defining sustainability reporting in the grocery industry,” stated Mark Koppang, director of sustainability at Raley’s Supermarkets, based in West Sacramento, Calif. “It enables companies to demonstrate their ESG commitment to their team members and customers and improve the industry overall.”
Radio Institute, which is working with several retailers and cooperatives to adopt the standard, solicited feedback from retailers, sustainability professionals, regulators and vendors during a 60-day public comment period. The Institute offers consulting engagements, educational training and the Sustainable Food Retail Certification program to help retailers adopt the standard.