Month: January 2024

By Srinand Yalamanchili, Mallory Thomas, Brianna Hardy

With the middle market being the bulk of the supply chain, it’s important to understand the ESG — environmental, social and governance — pressures from public companies that are trickling down and impacting the middle market.

Whether a company is privately held or not, middle market companies will need to be transparent with their ESG reporting to the level that these large companies require.

Without the in-house capability to report ESG metrics, companies are going to be less competitive in the marketplace when it comes to RFPs and maintaining contracts with large companies who require greater levels of transparency.

For many companies, understanding where they are in their ESG journey is the first step to designing and implementing a successful ESG strategy. It takes time to develop your reporting structure and to incorporate ESG initiatives into your company strategy. Begin by evaluating your ESG strategy, risk and reporting needs now.

Connect with an ESG specialist at Baker Tilly

Why should companies dive headfirst? 

Regulatory demand and implications to supply chain with increased compliance and reporting requirementsStakeholder demand and supply chain requests for sustainability metricsTalent attraction and retentionMarket competitiveness and new access to capitalValue creation from cost savings and energy efficiency through transition activitiesRisk mitigation (economical, transitional, environmental, reputational, etc.)Reporting and assurance requirements

ESG is not a passing trend and focusing on ESG is imperative.

Industry examples and business impacts 

Manufacturer required to report on scope 3 emissions for SEC company up supply chainLife sciences company to win new market share after reporting out climate-related dataGM supplier asked to pledge to incorporate ESG standards and commit to achieving carbon neutralityPrivate equity firm requested by investors to assess and manage ESG and climate-related risksNon-profit organization wins competitive bid as a result of transparently reporting GHG emissions inventory as part of the RFP process

There are steps that middle market companies can take today to protect and enhance their market share and their value as a result of the ESG transparency needs that will be cascaded upon them. It’s just a matter of getting started.

Climate change is one of the greatest threats and challenges to our planet’s future, and food waste remains a significant contributor towards greenhouse gas emissions. In the United States, roughly 40% of all food produced is ultimately wasted, equivalent to 80 billion pounds or 1,000 Empire State Buildings. This mass amount of wasted food generates 10% of all United States greenhouse gas emissions. In 2020, Vanguard Renewables, Unilever, Starbucks, and Dairy Farmers of America founded the Farm Powered Strategic Alliance, a collaborative group of leading national and regional brands focused on advancing sustainability. The Alliance’s members have shared goals to boost food waste reduction and recycling, expand renewable energy production across America, and support generational farms and regenerative agriculture practices. Since 2020, the Alliance’s membership has grown to include more than 20 national and regional food and beverage companies.

Each Alliance member commits to capturing as much of the food waste inherent in the farming, manufacturing, and sale of food and beverage products and to recycle as much of that waste as commercially feasible via Vanguard’s farm-based anaerobic digestion program. Vanguard also works with Alliance members’ suppliers to recycle their food waste. Members are committed to the advancement of renewable energy and have the potential to procure renewable natural gas produced by Vanguard’s farm-based anaerobic digesters. The Alliance also serves as a brand elevation tool for consumers, investors, and other stakeholders by demonstrating members’ commitments to making choices that will lead us to a more sustainable future.

Vanguard Renewables’ Farm Powered solution is a sustainable model for the treatment of manure and food waste that supports American agriculture while reducing greenhouse gas emissions and producing renewable energy. The Farm Powered Strategic Alliance is a way for sustainability leaders across the food and beverage industry to collaborate towards shared goals. As Jed Davis, Vice President of Strategic Engagement and Sustainability at Cabot said, “there isn’t a reason in the world not to join the FPSA and be part of the solution.”