Quick-service restaurants, like so many enterprises, have spent the past several years attempting to reduce their carbon footprints. However, recent public outcry has arguably accelerated their sustainability goals. In 2018, the now famous image of a sea turtle with a plastic straw in its nose became the face of a global movement to end single-use plastic products, leading several states to implement plastic bans—particularly impacting the quick-service sector.
For a highly visible, customer-facing industry that relies on brand loyalty, this shift in consumer preference and legislative compliance has been a wake-up call for restaurant leaders. Some are heeding the call with engaging sustainability campaigns, but there’s a larger, looming issue behind these well-intended campaigns—most quick-serves cannot accurately measure, and therefore mitigate, their carbon footprints. More specifically, most brands do not have adequate data management strategies and capabilities in place to track emissions across their value chains and provide accurate ESG reports—which will be of particular concern to publicly traded quick-service restaurants thanks to the SEC’s March 2023 proposal.
So what challenges are holding restaurants back and what can they do to get their emissions measurement tactics on track?
Recognizing your roadblocks
Whether they’re regional, national, or international companies, quick-service restaurants have complex value chains, operating networks of internal and external stakeholders across geographies. This has led many organizations to inaccurately identify, track, and calculate the various sources that collectively contribute to their carbon footprints across scope 1, 2, and 3 emissions, such as:
Waste: Companies must track food waste, package waste, and landfill waste over time from both storefronts and operations. This includes tracking quantity, region, type, source, and destination in order to accurately compare the percentage of waste reduction against corporate goals.
Energy: Corporations need to track electricity, gas, renewable energy, and water consumption at restaurants and other facilities in their networks. This is particularly significant in regions with high water baseline stress.
Transportation: For corporations that operate logistics and/or delivery services, they must monitor fuel consumption, distance travelled, routes, cargo loads, schedules, and carbon emissions.
Sourcing: On the other end of the supply chain, restaurants should track their sourcing and procurement metrics for products and ingredients.
Compliance: Although it’s not a source of carbon emissions, companies should also use their data capabilities to actively track and monitor local, state, and federal sustainability regulations to compare their emissions metrics against compliance mandates and assess their decarbonization goals using real-time benchmarks.
Beyond the evolving regulatory landscape and the overwhelming amount of data sources throughout their complex value chains, quick-serves are also contending with considerable legacy technology roadblocks. Many companies do not have required sensors or IoT solutions to collect data which in turn impacts their sustainability agendas. And many enterprises also do not have centralized data platforms to measure the impact of their actions and adjust their net-zero strategies.
Implement a data-first approach
Carbon tracking strategies will inevitably vary from company to company—especially as leaders grapple with their own unique set of challenges. However, it’s safe to say that most quick-service chains fundamentally struggle with data-related issues and therefore should implement a data-first approach to revamp their carbon footprint measurement and mitigation agendas. Here are four tactics to kickstart a digitally enabled, data-first approach:
- Implement a centralized sustainability data hub, which enables a scalable, automated, and auditable solution and supports ESG needs with efficiency and accuracy
- Conduct a comprehensive life cycle assessment (LCA) across the value chain to identify hotspots for emissions reduction
- Collaborate with suppliers to improve data transparency and quality
- Engage and educate employees, and identify champions to foster a culture of environmental responsibility
- Establish data and reporting audit frameworks to support auditability and assurance for sustainability vitals
Capgemini introduced a similar approach while working with one of the world’s largest coffeehouses to introduce an improved ESG reporting and carbon accounting strategy. Working with the organization, Capgemini helped create an automated, scalable, enterprise-wide ESG data and reporting platform. The multinational corporation can now share ESG metrics with internal and external stakeholders, comply with regulations across geographies, track and refine sustainability goals, and improve ESG auditing capabilities.
Despite the progress quick-service brands have made in their decarbonization journeys, there’s still a long road ahead—with heightened customer expectations and evolving legislative speedbumps. Sustainability strategies rely on accurate carbon footprint tracking, and that is only possible when quick-service restaurants implement a data-first approach with enhanced digital solutions, improved processes and assessments, a collaborative stakeholder network, and a renewed culture of environmental responsibility and education.
A few global leaders have forged ahead of the restaurant industry, allocating the time, money, and talent to track carbon emissions—and ultimately enhance brand loyalty, avoid regulatory fines, and improve operational cost savings. However, there are still many organizations that must catch up.
Dinesh Batra is a Vice President of Insights & Data and Sustainability for Sogeti, a part of Capgemini. Dinesh is a seasoned AI leader with 17+ years of cross-sector experience in AI, Machine Learning and Sustainability. He has experience working with C-Level executives helping them institutionalize AI solutions in their organizations leading to tangible business value. He has also helped organizations in their Sustainability journey through advisory and innovation, to help them achieve their Net Zero ambitions.