Unlocking commercial value from environmental data

An untapped commercial opportunity

Data is an essential ingredient to deliver food system transformation that meets climate and nature goals while balancing health, social and economic outcomes. Importantly, it is also a commercial growth lever that can unlock significant value for businesses and the wider food system.

But right now, businesses are missing the opportunity to use it.  

Using environmental data is seen as technical and emissions-focussed challenge, owned by sustainability teams working towards specific environmental goals rather than a strategic priority shared across whole organisations.

But businesses who integrate environmental insight into commercial decision making, category strategy, supplier negotiations and innovation pipelines will unlock opportunities for growth, value creation and long-term resilience. This can be done in two distinct but complementary ways, including through emissions mitigation, and strengthening climate adaptation.

The data is there. The question is: who will start to use it in commercial decisions?

In an earlier IGD article, we wrote about the disconnect between ambitions in businesses sustainability functions, and the practical understanding and skills in commercial teams needed to embed sustainability into every-day business decision making. Now, recent discussions with our Food Systems Change Leader Forum have shifted from a focus on the challenges, to progressing the solutions to unlock commercial value from environmental data.

For the first time, businesses have ‘enough’ data

In recent years, the system has invested heavily in improving environmental data – including its quality, granularity and comparability. Initiatives such as the Defra Food Data Transparency Partnership Eco-Working Group and the WRAP Food and Drink Pact have been leading on much of this progress.

Today, businesses now have a range of environmental data available to draw on. For example:

• System-level data from the Net Zero Transition Plan for the UK Food System

• Open-access farm and product data from Hestia

• Product-level footprint data from tool providers such as Mondra

The data is not perfect. Standards and governance for using the data are still evolving.

But perfection is no longer a barrier. There is sufficient data to begin integrating environmental insight into real commercial decisions and for businesses to take advantage.

The commercial use cases are bigger than many realise

There are a huge range of use cases for environmental data, that unlock opportunities such as

• Access to capital – strengthening ESG credentials and investor confidence through risk mitigation

• Revenue growth – informing innovation, brand positioning and customer engagement

• Cost and risk reduction – from a market, policy and climate perspective enabling supply chain resilience and input efficiencies

Most organisations remain at ‘foundation’ level, with sustainability teams using data for reporting and compliance.

The real commercial opportunity lies further along the maturity curve – embedding environmental data into category management, joint business planning and risk and resilience planning for the long-term.

This requires clarity on what level of data is “good enough” for each use case — and confidence from commercial leaders to begin applying it.

Building commercial capability, starting now

It is certain that environmental data will continue to improve.

And commercial capability needs to develop at the same time.

There is no time to waste in supporting commercial leaders to interpret and use environmental insight alongside metrics they use in BAU, such as price, volume and health.

In our latest conversations with industry Food Systems change Leaders, we began scoping the priorities for system-wide action that will support commercial teams capability, including:

• Scaling IGD’s Net Zero Training programme for commercial leaders, to increase awareness of Net Zero and build confidence in using environmental data to identify risks and opportunities.

• Testing how environmental insight can be embedded into buyer–supplier partnerships and business-as-usual decision frameworks

• Developing practical guidance to support integration from both a cultural and operational perspective

The businesses that move now will help shape the relationships, standards and guidance for food system progress.

If you have experience integrating environmental data into commercial decision making, we would like to learn from your experience. Get in touch to share your insights and help accelerate progress across the industry, by contacting [email protected].