From nice-to-have to need-to-have: Experts say sustainability must be considered a ‘cost of doing business’

By Amanda Lim

- Last updated on GMT

Companies need to rethink how they implement sustainability initiatives and should integrate them it into the ‘heart’ of their business models. [GettyImages]
Companies need to rethink how they implement sustainability initiatives and should integrate them it into the ‘heart’ of their business models. [GettyImages]

Related tags Sustainability Business

Companies need to rethink how they implement sustainability initiatives and should integrate them it into the ‘heart’ of their business models, a panel of experts at the Global Fragrance Summit organised by the International Fragrance Association (IFRA) has claimed.

Bérangère Magarinos-Ruchat, global head of sustainability at Firmenich, emphasised that sustainability is about an “end-to-end approach to responsible business”.

“It's not just about climate change, it's not just about the environment in the way that people would think a few years ago. [Sustainability] in every sense also means sustainability on social impacts… It's also everything around, legal compliance, ethics, how you're running your business. It really goes from making sure you don't do anything wrong, all the way to benefiting from innovation, and growing business for good.”

Partners in sustainability

She credited the Sustainability Charter developed by IFRA and the International Organisation of the Flavour Industry (IOFI) in 2020 for prompting changes in the way the industry talks about sustainability.

For instance, she added that companies needed to alter their mindset of supporting local growers and communities that have been essential in supplying the industry with “incredible ingredients to make perfumes”.

“The evolution of sustainability is looking at an equal relationship. The key towards it is really a partnership. Because when we say ‘support’ it might just be a quick fix like improving education… We are not NGOs just trying to help people and I think it's very important we start evolving on that.”

Maria Julia Oliva, deputy director and senior coordinator for ABS and policy, Union for Ethical Biotrade agreed, adding that going green is ultimately good for business.

“This is not something that we are doing as philanthropy, that we’re doing because we are nice. This is something that is an integral part of what we do to be able to still have a business in 10 years.”

To do so, the first action or step is really to engage with the suppliers to gain a better understanding of the concern of the communities, said Stéphanie Paquin-Jaloux, IFRA-IOFI Nagoya Protocol Taskforce Vice-Chair.

“On a company perspective when you work, who you want to work with the community is really to work with your supplier. The idea is really to engage your supplier who has a relationship with the community for them to be aware and to understand the concept of the potential concern of the community so that you're not alone on the ground and you rely on a partnership.”

‘The heart of any business model’

As such it is imperative that sustainability should not be treated as a nice-to-have but thought of as “the cost of doing business”, ​said Magarinos-Ruchat.

“[Sustainability] cannot be just your side budget somewhere. Again, it’s a part of the way a company operates so it has to be integrated… across what the company does.”

She added that COVID-19 has reemphasised the importance of sustainability in business, noting that companies that were engaged in the sustainability journey before were more resilient to the challenges brought about by the pandemic.

“It shows that sustainability is not just a nice-to-have on the side but if you have it integrated into your business model you can anticipate better. The learnings through COVID-19 will help us all when we come to dealing with climate change resilience, with nature loss resilience. This is not going to go away just because we have a vaccine; we have a range of other risks that we will need to look at. So, to me it shows, even more importantly, that sustainability has to be at the heart of any business model.”

This is where initiatives like the IFRA-IOFI Sustainability Charter can be valuable for companies in this sector.

“[The Sustainability Charter] offers a framework for the entire [flavours and fragrance] sector to collectively improve our performance. This being said I think a lot has already been donebut still I think having a platform with other companies right to share best practices, of course, while respecting antitrust obligations is certainly an added value,”  ​Sven Ballschmiede, executive director, International Organization of the Flavor Industry (IOFI).

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