Retailers lag on sustainability goals -- World Retail Congress report
The global retail industry must work harder and faster to make a meaningful impact to deliver on climate change commitments. That’s according to a new in-depth study by global management consultancy Boston Consulting Group (BCG).
The new Sustainability In Retail Is Possible–But There’s Work To Be Done study found that while sustainability is now a strategic priority for retail businesses "the vast majority were failing to make meaningful progress”.
While the accompanying survey, part of a collaboration with World Retail Congress which polled 37 major retail businesses around the world, revealed “widespread understanding of the competitive advantages to winning in sustainability”, the findings also showed there was “a clear disconnect between retailers’ bold ambitions and their progress on the sustainability journey”.
Only a select few of the companies had reached the stage where they could claim sustainability was core to the company’s strategy, decision making, and value creation, according to the research.
While 60% of the firms believed their company’s goals were “bold and differentiated", more than half had still not set any sustainability key performance indicators (KPIs) across their businesses to measure progress. Meanwhile less than 20% were currently on track to cut Scope 3 emissions, which include those of suppliers, by enough to meet targets for limiting the rise in global temperature to 1.5 degrees, set by the Paris Agreement in 2015.
It said some companies are stuck at “sustainability basics,” simply doing enough to comply with regulations and meet the minimum expectations of investors and other stakeholders.
But, importantly, the survey also noted that 90% of the survey respondents who work in sustainability "believe collaboration is key to achieving their goals and targets".
And on the plus side, the survey also found that the companies were “nearly unanimous” in believing that sustainability initiatives would drive value in the next five to 10 years and half of the respondents believed their companies would invest “whatever it takes” to reach their goals.
The report said those “advantages to winning in sustainability” included: a competitive edge over rivals; cheaper borrowing; lower costs; attracting new customers, and retaining employees, and the potential for tapping into new revenue streams.
But overall, the report highlights the “need for a seismic shift in attitudes and business processes to place sustainability at the core of corporate strategy, decision making, and value creation.”
It added: “Firms need to do more to augment and accelerate their responses to tackling issues such as plastic packaging, which accounts for 40% of global plastic use.”
Ian McGarrigle, chairman of World Retail Congress, said: “As the industry moves in the direction of greater sustainability, a focus on progress, rather than perfection, will be critical.
Shalini Unnikrishnan, a managing director and partner at BCG, and a co-author of the report, added: “There may be an inclination to wait for perfect data on sustainability drivers and constraints before starting to act, but that would be a mistake.”
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