Fast Moving Consumer Goods (FMCG) – defined as food and beverage, household and personal care – are an important economic growth sector for Asia and a crucial component of financiers’ portfolios, due to a growing middle class population and urbanization. But companies risk serious environmental and social impacts over coming years if their supply chains are not well-managed, especially those relating to ‘soft’ commodities (agriculture, forestry and seafood), water and packaging.
WWF’s Asian Fast Moving Consumer Goods Sustainability Guide is the first-ever review of public data on soft commodities, water and packaging from 26 companies in nine Asian countries.* It identifies key risks, sets out the business benefits of sustainable practice, and provides practical recommendations for improvement.
Overall, Asian FMCG companies have a low awareness of environmental, social and related business risks compared to Western FMCG companies that are leading on sustainability. They have made limited progress in managing risks due to less scrutiny from customers, financiers and civil society. Corporate disclosure, investor engagement and due diligence by lending banks are also low in the region, though this is starting to change.
Through the launch of this guide, WWF is challenging Asian FMCG companies to implement sustainable sourcing policies based on credible, international certification schemes with time-bound targets and regular progress reports. WWF is also calling on companies to demonstrate sound leadership in water risk management using WWF´s Water Risk Filter, and to develop packaging strategies that meet product needs while providing maximum benefit for the system as a whole.
WWF recommends financiers of Asian FMCG companies assess their portfolio companies, banking clients and potential new investments as a priority, linking costs and access to capital to more sustainable practices.