Nature gets a seat at the retail boardroom table

From increasing supply chain transparency and validating science-based targets for carbon reduction to launching a host of new retailing models in store and online, retailers are addressing the climate crisis in multiple ways.

An interview with Sabu Mathai, research director in the Gartner Supply Chain Practice, published on the analyst firm’s website in August 2023, makes for interesting reading regarding the chief supply chain officer’s (CSCO) role in sustainability strategy. CSCOs who want to build or who are embedding sustainability into their companies rather than prioritising resilience - as has been a trend in this recently unstable global economy - tend to envision “a long-term supply chain transformation that takes both sustainability and resilience as core design principles”, he says.

Mathai also suggests CSCOs who prioritise sustainability “ease the costs and first-mover disadvantages of sustainability through ecosystem partnerships”, which means the benefits and burdens of sustainability are shared with competitors and partners. They also make sustainability a key driver in their risk management processes, he adds. “Ultimately, supply chain sustainability isn’t something CSCOs can achieve on their own - it requires an enterprise approach”, Mathai comments. “However, less than a third of supply chain leaders report that their internal business partners appreciate the connection between sustainability and either risk management or business performance. This means CSCOs will need to start by making sustainability’s risks and opportunities much more apparent for other senior leaders.”

Indeed, if you take a look at recent trends from European retail, the message around sustainability’s importance to the long-term prospects of organisations seems to be getting through. Five key areas of development stand out and are worth referencing.

Increased transparency

It is difficult to manage what you do not measure, and retailers are opening up their supply chains to start unpicking the processes – including material sourcing and factory production – to understand their current environmental footprint. Operating with that transparency on an ongoing basis paves the way for improvements and interventions.

Retail groups and brands investing in the tools to do this in 2023 include UK-based Pentland Brands and global running brand Brooks.

Meanwhile, cosmetics brand L’Oréal continues to work towards its ‘L’Oréal for the Future’ sustainability goals – and transparency is at the core of those ambitions. By 2030, the company has committed to having all formulas be 100% eco-designed, 95% of ingredients derived from renewable plant-based sources or abundant minerals, and packaging to be from ‘traceable and sustainable’ sources.

“We’re part of a cohort of businesses looking to push at what is possible for purpose and a profit-making business.”

Green ambitions verified scientifically

Two of UK retail’s largest players laid down a significant marker in 2023 for how they intend to reach net zero carbon emissions across their value chains, in line with Paris Agreement targets to limit global temperature rises to 1.5 degrees Celsius by 2050. Retailers of all shapes and sizes have laid out their sustainability ambitions and are embarking on various initiatives to reduce their carbon footprint, but Tesco and the John Lewis Partnership (JLP), which operates the John Lewis and Waitrose chains, are the first to have their entire plans validated by the Science Based Targets initiative, the acclaimed body for verifying such matters.

This is a growing area of focus across Europe as legislation will require big public limited companies to lay out plans for their transition to net zero.

More circular thinking

In fashion, resale is a trending topic. Retailers ranging from The North Face to New Look have ramped up their second-hand initiatives in recent months. The so-called pre-loved movement which encourages consumers to donate clothing they no longer want – typically in return for a discount voucher on a future purchase – is gaining traction, with retailers able to divert items from potential landfill and also make a further margin on items they may already have previously sold.

Outside of fashion, furniture retailer Ikea is running car-boot sales and flea markets in its car parks to highlight the importance of keeping goods in use for longer. It has also ramped up space in its stores for second-hand items, promoting the circular economy and the importance of repairing and reusing materials.

Decarbonising the supply chain

Retailers have continued to find fossil fuel alternatives to power parts of their fleets and home delivery networks in 2023, albeit the limited technology available and current lack of comprehensive infrastructure to support the transition has slowed the pace of change.

Tesco has committed to all its UK home delivery vans being powered by electricity by 2030, while Amazon put 300 electric delivery vans on the road in Germany in 2023, as part of a wider pledge to invest more than €1 billion between 2022-2027 to decarbonise its European transportation network. It’s an area where large strides could be made quickly in terms of carbon reduction, and will continue to stay front of mind for retailers in 2024.

Nature on the board

In September 2022, Patagonia founder Yvon Chouinard announced he was giving away his business to make Planet Earth its ‘only shareholder’, effectively directing all profit not reinvested in the business towards tackling climate change. Then, a week later, UK-based beauty brand Faith in Nature revealed it had given nature a company director role. Faith in Nature created an entirely new governance system allowing a non-human entity to be represented on the board by a responsible human, who is legally bound to speak on behalf of the natural world. It capped a remarkable week of retailer eco pledges. In an interview with Green Retail World in July, Faith in Nature sustainability director Laura Ford said: “We’re part of a cohort of businesses looking to push at what is possible for purpose and a profit-making business.”

Other retailers might not be going quite as far as Ford’s team at Faith in Nature or they may not be as radical as Patagonia, but LinkedIn research suggests sustainability manager is one of the fastest growing job titles today. This shows businesses are putting the relevant leadership in place to navigate the green-focused years ahead – and it’s not just the CSCO who is responsible for guiding organisations on that journey.

Ben Sillitoe, Editor & founder of Green Retail World