Europe is leading the charge in legislative change surrounding sustainability and green development. In 2019, the EU adopted the European Green Deal, a set of policy initiatives that aims to make Europe climate neutral by 2050.
According to the EU website, the legislation ensures that Europe’s economic growth is environmentally sustainable and recognizes that the EU plays a key role in promoting sustainable development at a global level.
Effects of this legislation are trickling down to legislative changes in individual countries within the EU, and are evident in efforts within the supply chain to comply with sustainable development requirements, such as the opening of the “green supermarket of the future” by REWE, a German based market chain.
Efforts like these also speak to the social pressure that often drives changes more directly than legislation. This is certainly true in the United States where legislation has been slower to form but social pressure to meet sustainability and green development goals is increasingly present.
Although it may be a while before US regulators begin to implement requirements relating to these issues, public pressure may require supply chain actions for brand reputation much sooner. In the past, only recalls related to illness and death made headlines. In today’s world, product defects or shortcomings can impact brand reputation.
How long before products manufactured with poor labor practices or environmental contamination lead not only to social media posts and boycotts, but actually removing the products from the supply chain to prevent brand erosion? In these cases, withdrawal, a recall action that isn’t connected to regulation but rather is a market or supply chain correction, may be the best course of action. Quick acknowledgement and corrective action minimizes potential damage.
Being aware of and considering public sentiment is increasingly necessary, especially in the age of social media which enables the rapid spread of grassroots movements. Although not every situation needs an extreme action such as withdrawal, listening well to public sentiment will help brands avoid unnecessary damage to their reputation.
Beyond that, building in best practices that embrace sustainable and green development will only serve brands as the world continues to move in the direction of legislative change addressing these issues.