CSRD shakes up the food industry

The Dutch food industry is on the brink of significant changes. New legislation and societal pressure are increasingly focusing on sustainability. Supermarket suppliers are being closely scrutinized. Those who fail to improve quickly or provide transparent, reliable data about their sustainability performance may lose their place on supermarket shelves, says Rob Morren of ABN AMRO.

With an average of 25,000 different products in European supermarkets, both retailers and suppliers are compelled to critically evaluate their production processes. The Corporate Sustainability Reporting Directive (CSRD) and the European Union's anti-deforestation legislation mandate precise reporting of environmental impact and social well-being. Suppliers struggling to meet these requirements face significant challenges. The legislation demands not only detailed reports but also concrete actions to enhance environmental performance.

Just the beginning

The implementation of the CSRD is a multi-step process. Initially, companies focus on understanding the requirements. The ultimate goal is to complete a dual materiality analysis. This analysis examines the company's impact on global sustainability and the effect of a changing world on the company's resilience. Simultaneously, there is a strong effort to collect standardized data across the entire supply chain. These insights will enable supermarkets to objectively compare suppliers and make decisions about future collaborations.

Risks and opportunities for suppliers

Suppliers who fail to report reliable and uniform sustainability data risk losing their spot on supermarket shelves. This is especially true for easily replaceable products or those of less strategic importance. Supermarkets, driven by the same sustainability legislation, will increasingly base their assortment on their suppliers' sustainability performance. However, this also presents opportunities. Suppliers demonstrating superior performance can expect a larger share of the supermarket space and use sustainability as a valuable selling point.

These shifts in the food industry are a clear signal. Suppliers and supermarkets must work together on sustainability, not just to comply with legislation, but also to survive in a competitive and rapidly changing market. For suppliers willing to take on the challenge, there are opportunities to strengthen their market position and lead the way towards a more sustainable future.

Abnamro.nl