One of the hottest words this year in business circles has been sustainability. Business, across sectors and industries, have been highlighting new ‘sustainable’ approaches, sharing ‘sustainable’ solutions and moving to identify brands as ‘sustainable’.
Sustainability refers to fulfilling the needs of current generations without compromising the needs of future generations while ensuring a balance between economic growth, environmental care and social well-being.
But, amidst the chatter, are sustainability objectives actually being met? Are these sustainable approaches and solutions actually doing what they promise to? Is sustainability being used legitimately or is it just another buzzword, leveraged to gain favour and win brownie points amongst consumers?
One way to challenge the credibility of sustainability claims ESG framework – a way to track progress towards environmental, social and governance standards. It’s now more important than ever to be aware of it – consumers are paying attention, investors are paying attention, and our planet is struggling to cope. According to a KPMG report, 72 per cent of CEOs believe stakeholder scrutiny on ESG will continue to accelerate and 17 per cent of them indicate stakeholder scepticism around greenwashing is increasing.
Packhelp, a Polish startup that is disrupting the packaging industry has launched its very own sustainability report, transparently showing how it is doing with regard to ESG framework. Founded in 2015, the Polish company offers an online marketplace for custom-branded packaging, providing solutions for e-commerce brands, retailers, agencies and enterprises. Packaging doesn’t exactly directly associate itself with sustainability, so we decided to find out more about this initiative.
Why has Packhelp published a sustainability report?
We decided to create an ESG framework and publish it in our report because we believe in transparency. It wasn’t, by any means, obligatory for us, but we did it anyway because it’s the mode of running business that we want to promote. Publicly disclosing our commitments is the way in which we want to demonstrate that our ESG initiatives and projects are not just greenwashing, empty promises, or lip service. Shedding light on ESG framework proves that the business is conducted in a considerate way and is not afraid of being accountable for its actions.
We believe that sharing our approach in such an open way helps customers understand our company better. It shows our motivations, and long-term vision, which is both important while entering a long-term collaboration with us.
But it also has a big impact internally. Publicly committing to our ESG goals is a signal to our employees that we take them seriously. It serves as an encouragement to include them in their everyday actions, and we already see the results. According to our internal survey, 51% of our employees identify as sustainability enthusiasts.
To wrap it up, the ESG framework is a set of measurable KPIs that will help us deliver on our promise and judge our progress on a yearly basis. It is the only path to build a credible and future-proof company for us.
What is an ESG framework, and what is the benefit of having one?
As the name suggests, ESG frameworks are standardised ways to communicate companies’ progress on environmental, social and governance initiatives.
There are a few of them in common use: Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and the upcoming european standard related to Corporate Sustainability Reporting Directive (CSRD), which is called European Sustainability Reporting Standard (ESRD). Just in November, the EU agreed on the draft of ESRS, so we can expect that it will become the standard for European companies in the next few years.
It’s more important than ever to back your promises as not only customers, but also potential employees and investors are paying attention to companies’ ESG performance and practices when deciding who to conduct business with, partner with, or invest with. According to a KPMG report, 72 percent of CEOs believe stakeholder scrutiny on ESG will continue to accelerate and 17 percent of them indicate stakeholder scepticism around greenwashing is increasing.
We are already preparing for our 2022 progress report that we will publish in Q2 2023. It will include both our custom metrics that are connected with the packaging industry that we’re operating in and official GRI metrics that will make it easier to compare our results with other companies. On top of that, we’re closely following the ESRD development in order to be able to respond to it once it enters into life.
What are Packhelp’s key targets and framework objectives?
When creating our ESG framework for 2021, we took a lot of inspiration from GRI. We conducted a materiality assessment and invited external stakeholders for a dialogue in order to include their expectations in our strategy. It was a very valuable lesson.
As an effect of this process, we defined 3 key areas of focus for Packhelp: Planet, People and Purpose and turned them into our reporting framework.
In the planet area, our goal is to make sure that we commit to packaging that is made of recycled materials and is made for recycling. We put a lot of focus on forest protection and transition into a circular business.
In the people area, we make sure to put employee satisfaction and development in the centre of our attention.
In the purpose area, we wanted to emphasise sustainable business model innovation. That’s why key metrics are about the % of revenue that comes from selling sustainable products and offering services that help the packaging ecosystem to move in the right direction.
Those metrics make our commitments measurable and visible. In addition to reporting purposes, we wanted to create something useful to us that is why we wrote them in such a way so that they are understandable to our employees.
How will you monitor progress?
We have an ESG committee at Packhelp that consists of official owners of three areas: planet, people and purpose. We meet quarterly to review progress, discuss important topics and plan next initiatives. We have access to most of the data on a quarterly basis, some of the data will be calculated specifically for our annual progress reports.
Why should companies publish sustainability reports?
Companies play important roles in transitioning our world into a better place, but most of them still measure just their financial results. If all companies started measuring their impacts, there will be more data for them to understand the risks and opportunities arising from environmental, social and governance areas. It’s high time we started giving our attention to topics other than just financials.
On top of that, reporting makes it very clear for business owners on which issues they should focus in their strategy. Thanks to requirements such as running stakeholders dialogue and conducting regular research in the areas that are usually left aside, companies gain a broader perspective on their own actions. It gives grounding, not to mention credibility in the investors’ eyes.
Last but not least, the approach to sustainability, governance and social aspects is becoming a more and more important factor for potential employees, partners and customers. Business ethics matters.
How do you go about embedding these ESG goals into company culture and business strategy?
By practising what we preach. First of all, we create our OKRs around metrics that are covered in the report. Secondly, by setting an example. For example, our Chief Strategy Officer – Artur Stańczuk – is personally responsible for the purpose area, ensuring that our company is heading in the right direction by doing the right things.
During the process of creating our framework, we also learned that a lot of people didn’t understand the ESG terminology, so we adapted it into something more relatable. This way we made certain that our framework is not only understandable but also easy to act upon.
Packaging doesn’t really stand out as the most eco-friendly industry – how are you aiming to change this perception? Can you?
I agree that the packaging industry is not an eco-friendly business. Using no packaging would be the most desirable solution, however, some form of protection is needed to get products through supply chains. What we are trying to do at Packhelp is to offer better choices for our customers.
We source our packaging from EU-based and often smaller suppliers who focus on domestic production and we make sure to provide clear information about particular sustainability features that apply to each packaging type available on our website, along with certificates backing up these claims. In terms of prices, we proactively suggest alternatives or different specifications to offer customers the best price and quality. We go an extra mile to ensure that everything is in place.
How does Packhelp help brands to be better at packaging?
We made stripping packaging from complexities our point of honour. A part of it is providing our customers with the knowledge necessary to make the best choice possible for their businesses.
We started with price calculators and now we are working on instant carbon footprint estimations. We also make it easier to untangle sustainability nomenclature with our eco properties. We provide certificates and advice, and have an individual approach to each customer.
What role can startups have in changing business approaches to sustainability?
Reporting is a challenge even the biggest companies struggle with. It is mundane and draining. Businesses prefer to count revenue, instead of entering into details related to their ESG performance. However, the ones who do it, pave the way for a new, transparent approach to business and stay ahead on schedule.
Startups are known for their power of disruption and turning the whole industries upside down. There’s a list of records proving startups’ successes in challenging the status quo. However well-worn this phrase is, it captures the spirit. The secret is to get down to work now instead of postponing changes till the last moment possible.