Exploring circularity approaches for a bakery ingredient wholesaler in the context of ESRS E5

Abstract

Food waste is a global problem causing significant economic, social, and environmental issues. In Finland, bread waste represents 12-20% of all food waste. The circular economy offers a transformative approach to these challenges by promoting waste elimination, prolonged use of materials, and the regeneration of natural systems. The European Sustainability Reporting Standards (ESRS) E5 aims to enhance resource efficiency and circular economy principles across the value chain, helping companies reduce their environmental footprint and improve long-term sustainability. The objective of the thesis was to assess current circular economy practices within the case company's food value chain and identify ways to enhance these practices to comply with the Corporate Sustainability Reporting Directive (CSRD) requirements, particularly ESRS E5. A mixed-method approach combined a comprehensive literature review with a qualitative interview. The literature review focused on circular economy practices in the food industry and the regulatory framework of ESRS E5. Qualitative data were gathered through a semi-structured interview with a managerial staff member to gain insights into the company's operations, value chain, and circular economy initiatives. The study revealed several circular economy practices, such as reusing pallets and Intermediate Bulk Containers (IBC), monitoring expiry dates, and supplying ingredients that extended product shelf life. However, improvements are needed in transitioning from virgin plastics to recyclable or biodegradable packaging and enhancing reuse and recycling practices, such as upcycling food waste and donating near-expiry products. To comply with ESRS E5, the company should formalize comprehensive policies on sustainable sourcing, circular packaging, and food waste reduction. Accurate data collection and clear, science-based targets for sustainability initiatives are crucial for compliance and operational efficiency. Raising awareness and educating stakeholders about double materiality assessment (DMA) processes would enhance the accuracy of materiality assessments. This study provides valuable insights and actionable recommendations that will aid the commissioner in achieving greater sustainability and regulatory compliance.