The new EU climate laws, to be announced in June, will compel operators in Europe’s consumer goods industry – forecast to be valued at $2.4 trillion in 2021 – to restructure their operations in line with carbon neutral goals, writes GlobalData, a leading data and analytics company.
Carmen Bryan, Consumer Analyst at GlobalData, comments: “The EU’s new climate goals will put increased pressure on FMCG players to adopt greener strategies. This is a good time for the plans to come into fruition; it is important that the partaking countries reach a consensus early in the decade to reassure investor sentiment and enable companies to implement long-term strategies. Consistency by policymakers and industry players alike will be key to ensuring these goals are achieved.”
Bryan continues: “Carbon footprint is also a key consumer priority. In a survey by GlobalData, one in five Europeans agree that information on a product’s carbon footprint is a decisive factor in their product choice – meaning that it is within companies’ best interest to adhere to these sustainability trends.
“The prominence of this consumer sentiment also varies among countries. Consumers in Greece recorded the highest response at 31%*, despite the country’s high national debt, while the Netherlands – a well-developed economy with an already established green infrastructure – stands at only 13%. Demand for sustainable offerings is influenced by socio, economic and cultural factors, however, a blanket policy like this will raise awareness and interest in sustainable practices across the board.”
Many industry players have already taken immense strides in revamping their operations to go carbon neutral. KitKat recently pledged to go carbon neutral by 2025, while L’Oréal Paris plans to reduce its carbon footprint by 50% per finished product by 2030 – in line with the EU target.
Bryan adds: “Moves like these by leading players in their respective industries will serve as further encouragement for smaller brands to jump on board. Consumers are willing to pay more for products that align with their values and needs, enabling brands with sustainable certifications to position themselves as premium. While this may prove challenging for those lacking the capital backing, green credentials will become increasingly important to remain competitive in the long term.”