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Boosting Sustainability In Retail
EyeonLaw
The Battle To Prioritise Sustainability In Retail
By Judith Allen, Partner at TLT.
The noise around sustainability issues grew in 2021, culminating with COP26 in November and the news that ‘Net Zero’ had become one of the ‘Words of the Year’ according to Oxford Languages.
The challenge for businesses has been how to sustain their progress around sustainability during a global pandemic, with all of its associated crises.
For retailers, the pandemic forced the closure of many physical outlets and in recent months, the industry has also been battling with a supply chain crisis and a shortage of workers.
Planet vs profits
We investigated this in our latest survey of the UK’s top 100 retailers, and found that while the industry has continued to place ever more importance on sustainability, competing priorities mean it has slipped down the agenda in the last year for a quarter (24%) of retail brands.
More than half (59%) of retailers admit sustainability has had to take a step back due to Covid-19, while the vast majority (77%) say their shareholders look at profits before sustainability. 78% believe sustainability will never be of equal importance to profit-making, and 44% admit their business sees sustainability more as a cost centre than a cost saver at the moment.
This highlights the vulnerability of sustainability as a priority in any business, and the debate sparked by fund manager Terry Smith when he claimed in the FT in January that Unilever has “lost the plot” by fixating on sustainability “at the expense of focusing on the fundamentals of the business.”
Eco innovation
But sustainability and profits can go hand in hand, and this “battle of the priorities” could spark a new wave of innovation in the retail and other sectors, such as exploring opportunities to share resources with other brands – e.g. logistics, to make deliveries cheaper and more environmentally friendly.
The total emissions from commercial buildings is also a growing concern, and something that all businesses need to look at – in terms of assessing their existing properties and aligning their due diligence processes for future property-related decisions with their sustainability goals.
Emissions come not only from energy use, but also from material manufacture, transportation, building construction, renovations, refrigerants, and a building’s end-of-life stage.
Future trends
Three quarters (72%) of retailers say they have announced sustainability improvements in recent years. A fifth (21%) are giving customers a choice between standard and sustainable deliveries, and 13% have launched a new line of sustainable products separate from their standard offering. 19% of fashion and beauty and 13% of lifestyle and leisure retailers have also launched a rental or resale service – a move followed by FTSE retailer Marks & Spencer on 14 November.
Following COP26, the message to UK Corp. is clear – every business has a role to play in reducing environmental harms and limiting climate change, and the pressure from government, regulators, campaign groups and consumers is only going to continue to rise.
Leveraging the collective power of the industry and finding common ground for action can help put the ‘eco’ in retail economics.
