Why ESG increasingly enters through procurement
In recent years, a number of regulations have been adopted or are entering into force that effectively push ESG through the entire value chain. The EU Deforestation Regulation (EUDR) directly affects cocoa, soy, palm oil and certain types of meat. The Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) require large companies to map risks in their value chain and quantify their impacts.
As a result, brands are increasingly asking suppliers for traceability, emissions data, socio‑environmental risk information and certifications. A supplier that can provide reliable data, documentation and ESG compliance becomes a partner rather than just a commodity provider. This directly impacts who will remain a supplier in the future, and who will be replaced.
ESG as a joint project, not a checklist
The biggest mistake in the brand–supplier relationship is treating ESG as just another questionnaire to fill in. In practice, the most successful collaborations operate as development projects in which supplier and customer jointly optimise:
formulations (lower CO₂, less waste, better labelling),
logistics (shorter chains, larger pack sizes, fewer empty miles)
and data management (standardised formats, periodic updates).
A supplier that understands the customer’s process technology, target consumers and commercial framework can offer solutions that improve ESG performance and save money at the same time. These projects take longer and require transparent data sharing, but in the long run they result in more stable partnerships.
How suppliers can support the “E” (Environment)
The environmental component is the most quantified part of ESG. Brands are increasingly requesting data on CO₂ footprint per kilogram of product, energy and water use, and waste streams. Suppliers can directly influence their customers’ performance here.
An ingredient supplier that has LCA studies or at least basic emission data for key products makes it much easier for a brand to calculate the total carbon footprint of finished goods. If a supplier does not yet have full LCAs, even partial data (for example, emissions in the agricultural phase or basic energy inputs) are a step forward compared to complete opacity.
Suppliers can also propose alternative raw materials or ingredients with lower emissions. For example, switching away from certain high‑footprint fats to lower‑footprint options, or replacing part of animal protein with plant protein in relevant categories, can significantly reduce emissions per serving. The key is that the supplier understands the technological impact of such substitutions on texture, shelf‑life and sensory profile, and offers a technically viable solution rather than just a theoretical “green” option.
Packaging optimisation is another area where suppliers have real influence. Reducing packaging weight, moving to recyclable materials and optimising formats (e.g. larger industrial packs where feasible) reduces waste and logistics CO₂. When a supplier provides clear information about recyclability and packaging composition, the brand can more easily meet its own waste and circular economy targets.
The “S” component: working conditions and responsible sourcing
The social aspect of ESG is often the most sensitive, as it touches on labour, safety, human rights and local communities. In food supply chains, perceived risk is particularly high for commodities such as cocoa, coffee, palm oil, sugar and certain agricultural crops.
Suppliers working with primary agriculture or global commodities can help brands by implementing their own supplier code of conduct for farmers and sub‑suppliers, supported by independent audits where possible. When a brand must report to regulators or investors on how it manages supply chain risks, having access to concrete evidence from the supplier side (audits, certificates, farmer support programmes) is extremely valuable.
At ingredient plant level, the supplier can support the customer’s ESG reporting by providing data on occupational safety, training programmes, equal opportunity policies and community engagement. Increasingly, brands also demand evidence that there is no child labour, forced labour or discrimination, even if the plant operates in a jurisdiction with relatively high labour standards.
For brands positioning themselves as “fair” and socially responsible, working with a supplier that has robust programmes for supporting local farming cooperatives, training for more efficient and sustainable production and even access to finance can be a powerful part of the brand story. However, to be credible, the supplier must report measurable outcomes, not just a narrative.
“G” – governance and data transparency
The governance segment is often perceived as the “paperwork” side of ESG, but this is where a brand decides how much it trusts and relies on its supplier. Systematic ESG management means that the supplier has clearly defined responsibilities (e.g. an ESG manager or team), adopted policies, procedures for data collection and internal data quality control.
For the brand, it is critical that the supplier can deliver consistent, verifiable data in a standardised format. This increasingly implies alignment with frameworks such as the GHG Protocol for emissions, as well as the ability to respond to questionnaires and standards imposed by major retailers and global customers.
A practical recommendation for suppliers is to implement digital systems for ESG data management and to prepare in advance the standard reports customers will ask for: a summary of emissions per product or product line, an overview of certifications, supplier policies and basic KPIs. Brands going through CSRD and CSDDD processes have less and less time for ad hoc information gathering and will favour “ESG‑ready” suppliers.
Practical ways suppliers can support ESG through formulation
In practice, ESG goals are often translated into very operational tasks: reduce emissions per kilogram of product, reduce processing waste, reduce the share of critical raw materials (e.g. deforestation‑linked inputs) or improve nutrient profile (less sugar, less saturated fat, more protein or fibre).
An ingredient supplier can offer concrete reformulation proposals. This may involve introducing ingredients that reduce process losses, such as stabilisers and emulsifiers that improve yield and reduce waste, or using proteins and fibres that enhance nutritional value without compromising texture.
In bakery, for example, replacing part of the flour with functional fibres can improve nutritional profile and extend freshness, reducing product waste. In dairy, optimising the combination of whey proteins and caseinates can provide greater stability in high‑protein drinks, reducing complaints and recalls due to sedimentation or phase separation. In meat products, using stabilisers and functional proteins that improve water binding reduces losses during heat treatment.
The point is that the supplier should not just offer a “green” ingredient, but a complete technological solution: how the ingredient affects texture, taste, process parameters, shelf‑life, waste and cost. Only then can the brand assess the full impact on its ESG targets.
Collaboration on traceability and digital product passports
With new regulations, especially those focused on deforestation‑linked commodities and similar risks, traceability becomes central. Brands need to track raw material origin back to farm level, or at least to the first collection point. Suppliers that build robust traceability systems, supported by digital tools, make it dramatically easier for brands to comply with legal requirements and substantiate claims to consumers.
Concrete steps for suppliers include introducing unique batch identifiers linked to location and collection/production date, maintaining a digital archive of certificates and analyses and using standardised data exchange formats with customers. For the brand, it is crucial that this information can be easily integrated into its own reporting systems.
A supplier that, in addition to classic specifications and analyses, provides an “ESG passport” for key products – with concise information on origin, emissions, risks and certifications – creates a real competitive advantage. Increasingly, brands choose suppliers based precisely on the quality and accessibility of such data.
Using certifications as tools, not as the goal
Certifications such as RSPO, Rainforest Alliance, Fairtrade, organic and others still play an important role, especially for high‑risk raw materials. However, a supplier that reduces ESG to “we have a certificate” is missing the bigger picture.
For brands, certifications add value when accompanied by context: what share of total volume is certified, what is the roadmap to increase this share, and what are the measurable benefits for local communities or the environment. Suppliers can help brands integrate certifications meaningfully into their ESG and marketing strategy, instead of using them as generic labels with little content.
For many brands, an immediate switch to 100% certified supply is not realistic. Suppliers can propose a pragmatic roadmap: blending certified and non‑certified streams with a clear plan to increase the certified share over time, in parallel with investing in on‑the‑ground improvement programmes.
How brands should work with suppliers for ESG to function in practice
For suppliers to truly help, brands must clearly communicate their ESG priorities and constraints. This means defining concrete category‑level targets (e.g. emissions per kilogram, share of recyclable materials, waste reduction percentages) and translating them into supplier requirements.
Best practice is to involve key suppliers early in new product development or reformulation. When the supplier comes in only at the end as a “price bidder”, the opportunity to optimise the formulation from an ESG perspective is largely lost. On the other hand, brands must be ready for transparent data sharing and sometimes for internal process adjustments to fully leverage suppliers’ ESG proposals.
Contracts and SLAs are starting to include ESG KPIs, such as availability of emissions data, share of certified raw materials or progress in traceability. This formal framework incentivises suppliers to invest in ESG capabilities because these capabilities are clearly linked to long‑term business with key customers.
Conclusion
In the food industry, ESG is less and less a communication topic and more an engineering, procurement and strategic challenge. Brands cannot, on their own, meet the demands of new regulations and consumer expectations; success directly depends on how ready their suppliers are to become partners in ESG transition.
Suppliers that invest in data collection and management, build traceability, and optimise formulations and logistics from the standpoint of emissions, waste and nutritional profile will naturally become the preferred choice for brands operating in increasingly strict ESG environments. In turn, brands that involve suppliers early in ESG planning and product development will gain not only regulatory compliance but also real cost savings, lower risk and clearer market differentiation.
ESG is becoming a maturity test for entire supply chains. Those who approach it as a joint development project rather than an administrative burden are the most likely to secure leading positions in their categories in the years ahead.