COP26 – Key Themes and Observations for the Retail Sector from Green Zone Sessions

As the legal services provider to COP26 in November 2021, DLA Piper engaged with the conference in many ways. Here we provide an introduction to the key themes, discussion points and takeaways from COP26’s Green Zone sessions, which focused primarily on food production and consumption – but which also have relevance to all agricultural commodities which form part of the value chain.

Key themes

As an overarching point, there is an increasing understanding that all parts of society, from government, business and consumers, must be involved in bringing about positive environmental change and that such involvement, engagement and action must be taken now and pursued with urgency. Other key themes include:

• the need for good data to develop sustainable practices and inform consumers;
• empowering stakeholders to make sustainable choices through improved infrastructure and education; and
• acting collectively to create systemic and sustainable change.

We will be following up on a number of these themes through a series of webinars over the next year – look out for invitations.

Data and information

The availability and use of data determines our ability to understand how climate change affects the supply chain: we need data to inform change in a scientific and data-driven way.

Access to data can be accelerated through information sharing between industry parties. For example, while retail companies may have information on consumer spending and purchasing behavior, they will have less visibility of the issues further up the supply chain and what issues are faced by commodity producers. Nonetheless, information about the circumstances of production is integral to improve production processes and thereby provide the most sustainable products to consumers.

Demands for increased information sharing and data collection inevitably create challenges from a data protection perspective. Retailers will therefore need to consider how they can deliver data-driven insights on sustainability issues whilst respecting individual privacy rights of customers and employees at all levels of the supply chain.

Climate Positive Infrastructure and Education

There is growing consensus that more information and education is needed at both ends of the supply chain.

Consumers often feel they are “swimming against the tide” when making sustainable choices because the unsustainable choice is often the easiest and the cheapest. Their decision-making process could be made easier through improved education on the actual environmental impact of consumer choices and by adapting infrastructure to make the sustainable choice the easiest and the cheapest.

If more information were available, consistent product labelling noting the environmental impact and sustainability of products (which some stakeholders are already in the process of developing) could make consumer choices easier.

At the other end of the supply chain, many groups are pushing towards a “bottom to top” approach in terms of farmers educating manufacturers and consumers on the climate issues they face and viable solutions to address those changes. Agriculture is often incentivized to destroy nature; sustainable incentives should produce the opposite result. Key to developing and maintaining sustainable practice will be to provide better funding, particularly for smallholders, traditionally considered risky investments, but often most in need of financial assistance to maintain their livelihoods while farming sustainably.

Throughout this process, companies within the supply chain reporting and publicizing these developments will need to ensure they are reporting accurately to avoid potential allegations of greenwashing.

Action through partnership

A significant discussion point across sessions was the need for action through partnership. No single group, sector, business or government will be able to resolve the climate crisis for the planet, nor achieve the milestone of net zero in that process, alone. Both horizontal and vertical partnerships in the supply chain are imperative. There have been some challenges to business - that in light of the urgency of climate change, business cannot hold on to sustainable solutions for their own competitive advantage – it is integral that industry shares information and solutions that can positively affect the planet. Nonetheless, taking action through partnerships can raise difficult competition law issues. Companies engaging in partnerships will need to be mindful of complying with competition law obligations and in some circumstances this can act as a barrier.

One outcome of the partnership approach seen at COP26 has been the updating of the UN’s Fashion Industry Charter for Climate Action. The updated Charter includes commitments from over 100 well-known brands to halve greenhouse gas emissions by 2030, set science-based targets, and set new targets for 100% of “priority” materials (i.e. cotton, viscose, polyester, wool and leather) to be low climate impact by 2030, particularly through closed loop recycling.

Final thoughts

A piecemeal, voluntary approach to creating sustainable food and fashion chains will fail to ensure implementation of necessary schemes. There is a push for government policy to require industry-wide approaches, industry-wide cooperation to share data and solutions for more sustainable production of goods and consumer engagement to make more sustainable choices.

There also is a growing consensus that such cooperation and action are urgent and need to be implemented now to create lasting sustainable change. Targeted and thoughtful investment will also be key, particularly at the very beginning of supply chains – which are often based in developing countries.

Please contact us to discuss how DLA Piper can help your business consider and address these issues.