In part one of this series, we explored why sustainability is becoming more important, and also what the big challenges are that retailers are facing. If you haven’t had chance to read it yet, click here.
In part two we are going to look at some of the solutions companies have implemented across their value chains to become more sustainable. The main areas being focused on are:
- Looking after their employees and those in the supply chain
- Better deliveries
- Building sustainable stores
- Transparency and advocacy
Looking after employees and those in the supply chain
For a long time, retailers have been looking after their employees to different levels. The most successful, long-term retailers often tend to be those that look after their employees well, and in a world where there is a challenge to recruit good talent this is even more important. Retailers are also looking at their supply chains to a greater level as consumer focus shifts to preferring ethical retailers.
- Diversity, Equity and Inclusion (DE&I) – in retailers, DE&I means enacting policies and programmes that promote the representation and participation of different groups of individuals. It is clear that this brings benefits to both the company and the employees – for more information, check out this McKinsey article. Quite often the first thing retailers work on is gender balance and equity in pay, and once this is in motion then other programmes are looked at.
- Health & Safety (H&S) – this has been an important topic for retailers for many years, and the main risks are well known; slips & trips, manual lifting, machinery and vehicles, working at height, working alone and fire. The key movement now is that retailers are also looking at the H&S of employees in their supply chains and at their suppliers as well as their own.
- Ethical supply chain – consumers are actively choosing brands that look after the workers in their supply chain, and there are many organisations now looking at how to ensure ethical supply chains, including the most well-known organisation Fairtrade.
In a linear world, where less than 10% of the economy is circular, we keep taking raw materials from our planet’s resources and they end up in landfill – becoming truly circular is a huge task, but we cannot keep consuming 1.75 earth’s resources every year. Retailers are making strides to tackle this, but it is not yet at scale, however the EU has recently brought in legislation about reparability of products which will help. Here are some of the things retailers are doing at the minute to be more circular:
- Patagonia are making products from renewable or recycled materials to ensure they are fully recyclable
- Loop have adopted a new business model that enables the recovery and reuse of materials
- The Ellen MacArthur foundation is supporting retailers to make their products more durable
- IKEA have a take back service where customers can buy and sell second hand or refurbished products
- Fashion brands are launching circular initiatives such as H&M’s recycling & repairing service, PLT’s marketplace and eBay‘s pre-loved section.
- Provide circular options such as rental, as the need to own products is being challenged, such as children’s bikes that you can change as the child grows with the Bike Club
- Tracking returns and finding local resale channels to make sure they are not wasted or increasing carbon emissions through excess transportation such as the work of RMX
Products & packaging
There is legislation making products and packaging more sustainable, and many companies are actively working on this.
- Improving production efficiency to reduce inputs and waste, such as the work that Ikano Industry do with machine efficiency and mattress recycling.
- Provide environmentally friendly packaging such as IKEA’s mushroom packaging .
- Cutting down on plastics and making packaging more recyclable and re-usable like the recent change from plastic bags to paper bags for fresh fruit and vegetables in UK supermarkets.
Consumers can now get some of their goods delivered within an hour from multiple retailers, so the CO2 footprint of deliveries is growing exponentially. This, combined with the fact that all these emissions are in areas people live and that deliveries are expensive for a retailer, means that action is being taken.
- Routing is one of the best ways to ensure efficiency – retailers can explain the CO2 impact of specific delivery options and give consumers the option to wait a longer time if the CO2 can be reduced.
- Zero emission last mile deliveries – there are many examples of smaller deliveries becoming zero emission or lower in CO2 – Budbee in Sweden is one example.
- Balance online vs. visiting stores – as more consumers become omni-channel customers, it is important to show them the most environmentally friendly routes to shop. We are currently doing some innovative work into mapping the CO2 footprint of customer and employee journeys which we hope will provide accurate and actionable data to be used to reduce the CO2 footprint of mobility emissions.
Building sustainable stores
Sustainable stores make sense as they are more cost efficient to run. There are many things that retailers are doing including:
- putting solar panels on the roof to increase energy efficiency
- installing renewable heating & cooling to increase water efficiency
- developing ecological areas
- delivering healthy places to work and shop that bring well-being and a positive social impact.
The main ways to gain certification are through LEED rating system | U.S. Green Building Council (usgbc.org) and BREEAM – BRE Group.
Transparency & advocacy
Finally, retailers need to decide how transparent they want to be, and this is becoming more important as consumers become ever more conscious of their shopping choices. As well as being transparent, retailers can advocate for change and many do, such as a group of leaders who wrote an open letter to the delegates of COP27 in support of the 1.5°C limit to global warming.
There are lots of actions that retailers are taking to become truly sustainable, and it is an exciting time to be in the industry. Next time, in the last part in this series, we will explore some data needs, challenges and solutions.