Before You Spend Another Euro on ESG, Fix These First

Despite growing budgets, the food and beverage sector is struggling to meet its sustainability goals.

Globally, 83% of companies increased sustainability spending last year (Deloitte’s 2025 C-suite Sustainability Report). Yet only 15% of food and beverage companies reporting to CDP are on track (Engie Impact Report, 2025).

Why the gap?

ESG dilution.

Effort goes into collecting data for reports, not driving operational change. Projects multiply: a regenerative agriculture pilot with 12 farms here, a packaging redesign there, a supplier scorecard that nobody acts on. Activity everywhere. Progress nowhere.

I saw this firsthand with a mid-size beverage company last year. They spent 18 months building a supplier sustainability scorecard. Beautiful system. Detailed metrics. One problem: procurement had no authority to act on the scores. The data went up. Nothing came down. The scorecard became a reporting tool, not a management tool.

That’s the pattern. And it’s expensive.

Before the next budget cycle, pause. Address the subtle costs of fragmented governance, poor integration, and weak sequencing. Restoring these core system functions often creates more value than launching something new.

Governance, at its core, is less about control than about moving change at a pace the system can sustain.

Pillar 1: Aligning the Three Governance Layers

Here’s what I see in most organisations: information travels up easily. Decisions and accountability struggle to travel down.

The system measures performance faster than it improves it.

For ESG to gain coherence, three layers must work in sequence:

When these layers disconnect, authority fragments. Targets exist at the top. Confusion lives at the bottom. And the middle becomes a bottleneck rather than a bridge.

I’ve seen this play out with a snack manufacturer working on EUDR compliance. The board approved the policy. The sustainability team built the traceability system. But procurement still optimised purely on price because nobody gave them different KPIs. The departments were working hard, just not together.

Why Governance Determines Your Transformation Path

When governance layers are aligned, choosing a transformation pathway becomes strategic.

When they’re not, the pathway chooses you – usually by default, usually the wrong one.

A dairy processor with strong board commitment but weak operational capacity will default to Big Plans that never activate. A beverage company with pockets of innovation but no cross-functional learning will watch local wins stay local. A confectionery brand hitting every compliance deadline but with no internal conviction will check boxes without changing behaviour.

The governance structure you have determines which transformation pathway you can actually execute.

Pillar 2: Choosing the Right Transformation Pathway

Genuine transformation can’t be deep, broad, and fast all at once (Termeer et al., 2024).

Pick two.

Trying to achieve all three is why so many ambitious F&B strategies stay theoretical. Strategic sequencing means choosing a pathway where effort actually delivers impact, and matching that choice to your current organisational reality.

1. Big Plans Pathway

Deep + System-Wide → Speed follows

Best for: Structural redesign, such as shifting to regenerative agriculture across your entire wheat supply chain, overhauling global logistics to cut Scope 3 emissions.

Risk: Inertia, where ambitious plans remain theoretical and never progress into delivery.

You’re on this pathway if: The strategy is comprehensive, but implementation hasn’t started. You have clear roadmaps but struggle to activate them.

Focus: Build structures that convert strategy into operational movement.

Example: A pasta manufacturer embedding soil helath into all supplier contracts, with short-term incentives tied to procurement KPIs.

2. Small Wins Pathway

Deep + Quick → Scale follows

Best for: Local innovation, such as a regional dairy plant piloting water reuse systems, a packaging team developing mono-material recyclable design that actually survives the production line.

Risk: Isolation, where progress doesn’t translate across the organisation. The pilot succeeds; the company doesn’t learn.

You’re on this pathway if: Pockets of excellence exist, but the organisation can’t replicate them. You have local innovation but it doesn’t spread.

Focus: Create systems that turn local progress into organisational learning.

Example: A beverage company using shared metrics and quarterly cross-site reviews to expand a successful water reduction pilot from one bottling plant to twelve.

3. Rule Changes Pathway

Broad + Quick → Depth follows

Best for: Regulatory and market changes, such as adapting to EUDR requirements, new EU packaging rules, CSRD disclosure demands.

Risk: Superficiality, where behavior adjusts procedurally, but internal conviction and decision-making don’t change. You hit deadlines but nothing feels different.

You’re on this pathway if: ou’re compliant on paper but sourcing decisions haven’t actually changed. You hit compliance deadlines but nothing feels different internally.

Focus: Make external requirements part of daily management.

Example: A chocolate manufacturer tying EUDR compliance directly to buyer incentives and supplier ownership structures, so traceability drives purchasing decisions rather than just paperwork.

What Connects These Pillars

Both pillars point to the same underlying issue: misalignment between structure and action.

Governance levels that don’t communicate. Transformation pathways chosen by default, not design. The result is effort without traction.

Effective governance begins with recognising which two dimensions matter most right now and allowing the third to develop over time.

In the F&B sector, this pattern shows up repeatedly. Many companies try to move on all fronts at once – deep, broad, and fast – only to find that ambition runs ahead of the organisation’s capacity to act.

Real progress comes from matching ambition to what the organisation can carry.

The problem isn’t how much a company spends on sustainability – it’s how they spend it. Your next budget cycle should focus less on new initiatives and more on the structures that hold them together: clear governance, strong integration, deliberate sequencing.

Fix the system first. The results will follow.

How I Can Help

At some point, every company outgrows the system it built.

The Sustainability Systems Risk Check examines how information, decisions, and accountability move through your organisation. It shows where the system is now and where it needs reinforcement before your next investment cycle.

Want to keep building on this? The newsletter goes deeper – written for teams who value structure, clarity, and measurable progress in sustainability leadership.