Is sustainability changing the way we do business?

Sustainability is transforming the way the industry does business. With society increasingly concerned with environmental practices, pet players must ensure they meet the environmental, social and governance (ESG) commitments they make to their customers.

Consumer-driven change

According to Friederike Edelmann, Vice President of Investor Relations and Corporate Sustainability at Californian distributor and manufacturer Central Garden & Pet, sustainability is taking shape in the US pet care industry and is set to propel the sector into the future.

“It can mean different things for different generations,” she says. “Older consumers tend to see sustainability more on the environmental front, whereas younger consumers are also very much looking at social aspects.”

For Pets at Home in the UK, an ‘action gap’ is evident, where consumer concern about sustainability doesn’t necessarily translate into purchasing behavior.

“There’s no doubt that consumer attitudes are starting to change from an ESG perspective,” says Amy Whidburn, the company’s ESG Director.

“We’re seeing signs, both through general external insight reports and in pet industry specific reports, that ESG considerations are moving up the consumer agenda.”

Changing attitudes driven by Gen Z appear poised to change the picture, with Whidburn adding: “This now seems to be shifting in the wider retail space and pet won’t be far behind.”

Considerations around concepts such as locally sourced, ethically produced and natural are moving upwards, although “what’s right for my pet” remains central for pet owners, she adds.

ESG plans of action

Pets at Home has made some strong ESG commitments in the form of an 8-step plan based around the pillars of Planet, Pet and People. It combines a sustainable investor return and innovative partnerships with suppliers and communities.

The company’s holy grail is “creating pet products and services that are right from a health and welfare perspective, have a lower environmental impact and are ethically produced”.

Examples of practical actions include introducing plant-based and insect-based pet food, as well as making a 2023 investment in Meatly, a cultivated meat company focused on the category.

“We believe cultivated meat has a big future in pet food,” says Whidburn. “Relying less on animal proteins and, hopefully, a much more sustainable production method, means a kinder future for all.”

According to Edelman, driving corporate social responsibility initiatives and using an ESG reporting construct are not only imperative to the future of Central, but integral to its operation.

“Grounded in our purpose to nurture happy and healthy homes, we’re focused on working towards building stronger communities, a more diverse and well-rounded employee experience and a healthier, more sustainable operation,” she says.

Brazilian pet retailer Petz adopted an ESG policy in 2021. ESG manager Carolina Ferreira Igi says: “Last year we conducted the Petz Greenhouse Gas Inventory, and at the moment we’re busy with 2 studies related to the topic. We are currently mapping climate risks and opportunities for greenhouse gas mitigation to know precisely where and how to act on reducing the impact of our operations.”

Recycling and packaging

Petz has begun producing more eco-friendly private label dog pads by using recycled materials from discarded diapers.

“The pads are manufactured with at least 40% reprocessed materials, plus sustainable raw materials,” Ferreira Igi says.

Central Garden & Pet has converted the packaging for its Nylabone dog chew toy into recyclable PET plastic.

It also recently launched Nylabone Gourmet Style Chew Toys, which has even less packaging.

Achieving energy efficiency

Pets at Home has lowered its carbon footprint – and its costs – by becoming more energy efficient. It has installed energy management systems and LED lights in its pet care centers.

According to Whidburn, the LED light investment paid for itself in under 2 years.

Looking further ahead, the company is also installing pilot voltage optimization technology, plus solar panels at its new distribution center to increase the site’s self-generation energy capacity.

In 2021, Central switched from incandescent lighting to LED across many of its US manufacturing and distribution facilities, including the Madison, Georgia site, which has saved 60,000 kWh annually since the conversion.

The company’s Nylabone business has upgraded manufacturing machinery from fully hydraulic to hybrid electric-hydraulic molding machines, reducing energy consumption by 70%, according to its ESG report. Using hybrid machines also reduces its carbon footprint by 498.9 metric tons per year.

Petz has made progress in its efficiency and automation project for air conditioning equipment, which represents a large part of the group’s energy consumption.

The devices now automatically turn off outside opening hours and when the outdoor temperature is low.

“Between 2023 and 2024, we went from 21 stores to 175 using this system. Our stores also have LED lighting, bringing positive results in energy saving,” Ferreira Igi says.

Are they meeting their targets?

As part of its 3 ESG pillars, Pets at Home has established 12 “ambitious” 2028 targets for reducing its scope 1, 2 and 3 greenhouse gas emissions, including a Science Based Target Initiative (SBTi) to achieve a 42% cut by 2030 and a 90% reduction by 2040.

After successfully reducing the carbon footprint of 60 own-brand products, Pets at Home plans to decarbonize range-by-range, as it works towards its 2028 targets and the 2030 SBTi goal.

“We are making really good progress in meeting our targets, but as with all businesses we still have a way to go,” says Whidburn.

In keeping with the 2015 UN Paris Agreement target to reach net zero greenhouse gases by 2050, Central says it is continuing to reduce its carbon footprint through an increased focus on clean energy and a reduction in the company’s overall energy consumption.

Edelman says Central is making progress, adding that the company plans to provide more details in its next Impact Report.

The initiatives taken include the installation of solar panels at its dog and cat manufacturing site, which Central’s ESG report says has helped reduce its annual carbon footprint by 249.4 metric tons.

What more can be done?

Although there are undoubtedly challenges in realizing their ambitions, many companies investing in ESG are optimistic about the direction of travel.

“I definitely think attitudes are starting to change,” says Whidburn. “We’re seeing more and more disruptive brands coming through that are leading with pet health and environmental sustainability in equal measure.”

She adds: “More can be done, as there will always be ways that we can reduce our carbon impact further, minimize impacts on nature, plus improve products and services for pets. It’s going to be a continuous improvement cycle.”

Ferreira Igi agrees: “There is still a lot to be done across the pet industry. This is mainly related to understanding the environmental impact of the food production chain and more solutions for the use of waste.”

These sentiments are echoed by Edelman. “The long-term profitability of our business requires us to do our part to protect the planet, care for the local areas we serve, and provide our Central employees with a safe, healthy and rewarding workplace,” she says.