But for some operators, it could tip the balance when it comes to customers parting with their precious cash and choosing to spend it with your brand versus a competitor.
We take a look at whether you should do it (and how), what the benefits are and what can be the pitfalls if it’s not entered into strategically and sincerely.
What are the commercial benefits?
2022, like 2021 and 2020, continues to be tough going for many hospitality brands and so why take on the extra task of pursuing sustainability goals? Aside from the obvious benefits to the planet, of which much has been said (see COP26), are there real commercial gains to be had from going green, both short and long-term? The answer is a definitive yes, and here are six key reasons why:
1. Competitive edge
Although many hospitality brands are beginning to pledge their commitment to net zero and carbon neutral goals, the British Chambers of Commerce survey still found only 11% of respondents measure their carbon footprint. And yet, studies by Deloitte have shown that 55% of consumers have chosen food and non-alcoholic beverage brands that have environmentally sustainable values and practices. The same report found that 32% of consumers would be prepared to pay more for goods and services if it ensured brands reduced their carbon footprint.
This gap between brands’ inaction and customer expectation is an obvious place for commercial gain and it’s those that show a transparent relationship with their customers and take action on sustainability that will be the long-term winners on customer loyalty.
2. Enhanced brand reputation
Research from the Carbon Trust found that customers increasingly expect companies to make sound ethical decisions on their behalf, with green businesses attracting new customers as they align with their beliefs.
3. Reduced costs
By reducing your energy usage with energy-saving initiatives like the “Save While you Sleep” programme from the Zero Carbon Forum or switching to a green tariff.
4. Attracts partners & investment
Consulting firm McKinsey last year highlighted that one of the five priorities of chief executive officers is to focus on a centralised sustainability strategy. This means enterprises are becoming increasingly stringent on the external companies they work with including catering and restaurant brands, checking them meticulously to see if their values align with their sustainable journey. Those able to demonstrate a meaningful sustainability strategy will be the winners while those brands showing zero initiatives are likely to lose future market share.
Becoming a net zero business may also be attractive for investors and shareholders looking for companies with a long-term sustainable strategy.
5. Provides security and resilience
Aiming for net zero can make your business more resilient against market or national disruptions. Adopting alternative energy supplies such as solar or wind may help shield your business from unexpected increases in the cost of energy.
6. Staying relevant
The importance of staying relevant as the demographics of your audience shift is key. As younger consumers see their spending power grow and older consumers age out of the workforce, how these cohorts spend in restaurants will likely cause a dramatic shift in the market. Being on top of your audiences’ views around social consciousness and acting accordingly to align your brand with these views is crucial for customer retention as well as acquisition.
These are all solid reasons why pursuing a sustainable business makes commercial sense. Thanks to COP26, increased media coverage and a number of non-profits spearheading change, customers are now grasping the gravity of the situation. Globally, 85% of people have shifted their purchasing behaviour towards sustainable options in the past five years. Along with large organisations, customers see themselves as the primary catalysts for change – they are playing their part and expect companies to follow suit.
Rob Pitcher, CEO of the Revolution Bars Group explained why their brand decided to turn to a sustainable operation in 2019 with a view to becoming a net zero business by 2030:
“It was both a deeply felt personal decision and a sound business one for me. Personal, because I have an eight-year-old daughter to answer to. Business, because if they aren’t already, your teams and stakeholders will soon be asking questions – and guests already are. We knew if we were to be a brand of choice in the coming years, we need to be doing some heavy lifting on sustainability or run the very real risk of being left far behind.”
How to calculate your carbon footprint
A carbon footprint refers to the total greenhouse gas emissions caused by businesses expressed as the carbon dioxide equivalent. When calculating a carbon footprint, the calculator-providing companies usually take into account all the emissions created from the business:
- Transport, including how products arrive, how staff get to work, what deliveries the restaurant makes etc.
- Utilities used: including water, gas, electricity etc
- Waste: all kinds of waste products, including biodegradable and non-biodegradable.
How do you start?
In the current climate, many operators are going to struggle to absorb the costs and at the same time make meaningful investments in the technology, expertise and equipment needed to pursue sustainability goals such as achieving net zero as quickly as they may wish. But there are a number of ways you can start:
It’s important to set out a clear strategy from the start on what you want to achieve which includes identifying time-specific goals, assigning ownership of each goal and setting out what the deliverables are for each goal.
Sustainability is something that needs to be embedded across the entire operation, ensuring that it is at the heart of the business.
Don’t try to go it alone. There are many hospitality businesses that have been on their sustainability journey for some time, making costly mistakes and learning along the way. Operators, particularly smaller businesses, can reap the benefit of this by gaining the best advice and saving significant time and money.
Zero Carbon Forum
Many collaborative initiatives exist of which the Zero Carbon Forum is one. It collaborated with UKHospitality at COP26 in 2021 to launch a roadmap as Kate Nicholls, UKHospitality’s CEO explains:
“The roadmap provides hospitality operators with guidance on the steps they can take to decarbonise their businesses and set net zero strategies. Business leaders from the hospitality sector have worked together to quantify the carbon impact across the hospitality industry and shared all the initiatives they have thus far taken to reduce emissions to help define the pathway to net zero. The roadmap outlines current trends, sector emission hotspots, decarbonisation opportunities, and practical steps for setting net zero goals. The action it calls for is consistent with limiting warming to 1.5°C and can be feasibly implemented in a wide range of businesses across the sector. The ambition is to reach a 90% reduction in operational emissions and reductions in supply chain emissions by 2040.”
One of their more recent initiatives is the “Save while you sleep” programme which is designed to help hospitality reduce costs, recover lost profits and cut carbon overnight. Forum members including Côte, Fridays, Burger King and the Stonegate Group have signed up to the programme and so far trials have realised energy savings worth £6,000 and avoided eight tonnes of carbon dioxide, per outlet, being emitted; the same as 17,000 car miles.
The programme works by combining energy and carbon analytics with operational training and ongoing coaching. Existing energy smart meter data is run through Zero Carbon Services’ proprietary intelligence platform, to identify energy wastage every day. Dedicated ‘” carbon coaches” provide analysis, insight coaching and training and on and off-site support to report high wastage sites, identify key causes, help with remedial actions, and benchmark performance.
The Revolution Group appointed a ‘Zero Heroe’s programme to help their staff take ownership of their sustainability strategy and has cited it as an integral part of their success so far. The initiative means each one of their sites now has a designated member of the team – a Zero Hero – to bring sustainability to life. Currently, their responsibilities include a focus on reducing out-of-hours energy consumption. They are also currently looking at ways to reduce waste and incentivise fellow team members to act even more sustainably which is something other operators could easily emulate.
For more detail on how you can start your sustainable journey, go to “How (and why) to make your restaurant more sustainable”.
What is the difference between Carbon Neutral and Net Zero?
Being carbon neutral means balancing carbon dioxide emissions released into the atmosphere through everyday business activities with the amount absorbed or removed from the atmosphere.
Net zero is similar in principle to carbon neutrality but is expanded in scale. To achieve net zero means to go beyond the removal of just carbon emissions. Net zero refers to all greenhouse gases being emitted into the atmosphere, such as methane (CH4), nitrous oxide (N2O) and other hydrofluorocarbons.
As with carbon neutrality, to reach net zero the greenhouse gases emitted into the atmosphere must be equivalent to the greenhouse gases being removed from the atmosphere.
Pitfalls of greenwashing
One of the biggest mistakes you can make is to treat sustainability as a tick box exercise and use clever marketing to exaggerate your sustainability measures. Your customers are not stupid and any attempt at greenwashing – when a company purports to be environmentally conscious for marketing purposes but actually isn’t making any notable sustainability efforts – will be exposed very quickly. Greenwashing can be hugely damaging to your brand as it was for Innocent Drinks earlier this year with its insincere TV adverts.
For starters, Innocent is owned by Coca-Cola, one of the worst plastic polluters in the world. The company also uses single-use plastic – which we all know is hugely damaging to the environment. Yet, their advert featured cute animals singing songs about recycling and fixing the planet in an effort to connect the brand with these contradictory causes. The advert was reported by Plastic Rebellion and subsequently banned by the Advertising Standards Authority.
Examples of profitable AND sustainable brands
Greggs launched its first sustainability plan – The Greggs Pledge – setting itself ten commitments to help make the world a better place by 2025, with the aim of developing these over the years to come. A year on, the business said it has made significant progress on its ten commitments and has reached some key milestones. This includes opening its first eco-shop; reducing the ratio of manufacturing food waste to sales by 31%; redistributing 28% of unsold food from shops; and donating more than 1,000 tonnes of food to charity partners. And crucially their sales were up 12% for the first half of 2022 compared to the same period in 2019.
The group have pledged to be Net zero by 2030; reducing our carbon intensity by at least 40% by that time; maintaining 100% renewable electricity supply; achieving a 30% reduction in water consumption; reducing supply chain emissions by 30%; cutting waste to landfill by 50% and overall waste volumes by 15%, all over the next eight years.
They are doing this by placing sustainability and energy savings at the heart of each planned refurbishment and implementing recycling zones behind their bars. They are rolling out energy-efficient equipment across all areas of the business, and all their direct electricity now comes from a zero-carbon supplier. They are very close to making their entire cocktail menu carbon neutral too.
“Companies now need their commercial objectives to be aligned with their sustainability ones – not the other way round. By doing so, we can help prevent the worst effects of climate change” says Rob Pitcher, CEO of the Revolution Bars Group.
And this stance is working as the group has just reported that their like-for-like sales are up 1.3% saying they have been focussed on cost management and their “industry-leading sustainability agenda has allowed us to reduce our carbon footprint and mitigate, in part, the widely reported energy cost price increases.”
Other brands like Benugo have launched a 100% carbon neutral coffee menu; the Boparan Restaurant Group are now carbon neutral across all their ten brands including Gourmet Burger Kitchen, Giraffe, Ed’s Easy Diner, Rebel Vegan and Slim Chickens; McDonald’s has pledged to achieve net zero emissions across its entire UK and Ireland business by 2040; QSR rival’s Burger King has become the first UK QSR brand to trial reusable and returnable packaging, in support of its efforts to slash single-use plastic from its restaurants by 2025.
It’s clear that to ensure long-term viability and commercial success, as well as human and planetary health, companies must invest, innovate and transform the way they do business sustainably.