Consider a request your organisation is likely to face—and may struggle to fulfill: A regulator, an investor, or your largest retail customer asks you to demonstrate—clearly and on demand—that a key commodity in your flagship product is deforestation-free, and that its sustainability claim can be substantiated at source.
For many consumer goods companies, that level of proof is not available. This gap is no longer a reputational risk. It creates direct financial, legal and commercial exposure.
Regulatory frameworks are tightening rapidly. The European Union’s (EU's) Corporate Sustainability Reporting Directive (CSRD) elevates sustainability disclosures to the same levels of scrutiny as financial reporting. The EU Deforestation Regulation requires companies to prove that key commodities are deforestation-free and legally produced.
At the same time, the quality of sustainability claims remains under pressure—many environmental claims are either vague or misleading and also lack supporting evidence. Together, these gaps are increasing regulatory and penalty risks.
What was once seen as a reporting or branding exercise is now a strategic necessity, driven by growing auditability requirements that directly influence supplier eligibility, regulatory compliance, and cost exposure.
For leadership teams, the question has shifted. It is no longer ‘What are our commitments?’ but ‘Can we demonstrate them—consistently, accurately and at source?’
For most consumer packaged goods (CPG) companies, most environmental impact sits upstream—in agricultural supply chains, and not in manufacturing or logistics.
This is where emissions are generated, where land use decisions are made, and where water, soil, and input practices determine the true footprint of a product. Yet, it is also where visibility is the weakest.
Today, upstream impact is largely measured using industry averages, regional benchmarks, and supplier self-declarations. While directionally useful, these approaches fail to capture the variation in real-world conditions. Farming practices differ widely, even within the same crop and geography, making averages an unreliable basis for decision-making.
The result is a clear disconnect. Organisations have set targets and made commitments but lack the field-level visibility needed to track actual performance or intervene effectively.
Three structure limitations reinforce this gap:
In practice, upstream sustainability is still managed as an estimation exercise rather than a true measurement discipline.
Managing upstream sustainability this way is not a measurement exercise but an estimation exercise. As the standards for accountability harden, estimation is no longer enough.
The tolerance for upstream opacity is rapidly shrinking—and faster than most enterprises expected.
Regulatory expectations are tightening rapidly. Requirements are becoming more detailed, more mandatory, and more consequential. For example, the EU's CSRD demands full value chain transparency with audit-level rigour.
This is being reinforced by a broader set of regulations targeting specific risks and claims. The EU Deforestation Regulation requires verifiable proof of responsible sourcing for certain commodities, while the EU Green Claims Directive will further raise the bar on what companies can say—and what they must substantiate.
At the same time, enforcement against greenwashing is catching up. Regulators across Europe, the UK, and the US are increasing scrutiny of sustainability claims, with penalties for those that cannot be backed by evidence; they are penalising claims that lack verifiable, field-level evidence. What was once primarily a reputational concern is now a legal and financial risk. In response, some are limiting disclosures to avoid scrutiny—highlighting a growing gap between stated commitments and what companies can actually prove.
Investor expectations are also evolving. Access to sustainability-linked financing and environmental, social, governance (ESG)-driven capital now depends on demonstrable performance. Organisations that can demonstrate progress with credible, data-backed metrics are rewarded with better financing terms and greater confidence, while others face higher scrutiny and reduced flexibility.
Finally, procurement standards are tightening. Major retailers and institutional buyers are embedding sustainability requirements directly into supplier contracts. Certification alone is no longer sufficient. Buyers increasingly expect traceable, verifiable, and timestamped data as a condition of doing business.
| Managing upstream sustainability this way is not a measurement exercise but an estimation exercise. As the standards for accountability harden, estimation is no longer enough. |
When CPG enterprises make this shift, the impact extends well beyond compliance.
The sustainability gap in CPG upstream is not structural—it reflects a mismatch between the ambitions organisations have set and the infrastructure they have built to support them (see Figure 2).
The capabilities required to close this gap already exist. At the same time, regulatory, investor, and commercial pressures are converging—making inaction increasingly difficult to sustain.
What is required now is a shift in how upstream sustainability is understood and managed.
Upstream sustainability is no longer a reporting or communications exercise. It’s an operational discipline—one that requires the same level of investment in data, infrastructure, and capability as any other dimension of supply chain performance.
Organisations that make this shift—moving from estimation to measurement, building intelligence on top of field-level data, and embedding accountability across supplier ecosystems—will not only meet emerging expectations. They will help define what credible, verifiable sustainability looks like in practice.
The path forward is clear. The advantage will lie with those who move early—and act decisively.
Upstream sustainability is moving from estimation to evidence. What was once a reporting exercise is now a requirement for market access.
Organisations that build verifiable, field-level visibility into their supply chains will move beyond compliance to define the standard for credible sustainability.