3. What do UK customers say?
• Retailers (supermarkets) are seen as the most
responsible sector with regard to climate change,
ahead of the general public, electricity and car
companies, food and drink manufacturers and
government
• But there is still more to be done - only a minority are
satisfied with current efforts on sustainability
• Collaboration is seen as an essential challenge if
retailers are to move the agenda forward significantly
Sustainability Issues in the Retail Sector, Ipsos MORI 2007
4. A Better Retailing Climate
• Sector-wide
• Leading actors and
those taking early
steps
• Single, clear
message
• Seeking to work with
partners to deliver
real change
5. Our goals
1. Reduce the direct environmental impact of our
businesses
2. Manage our climate risks
3. Help our customers, staff and suppliers to
reduce their environmental impacts and
vulnerabilities
4. Engage in the public policy debate and support
the Government in meeting its climate change
goals
5. Report our achievements transparently and
consistently
6. Reduce the direct environmental
impact of our businesses
– Cutting energy-related emissions from buildings by
15%
– Aiming for a reduction of 15% in energy-related
transport CO2 emissions from stores deliveries
– Measuring water-use in sites accounting for 75% of
usage, and setting targets for reductions
– Landfilling less than 50% of our waste, minimising
waste from operations and managing sustainably
unavoidable waste
7. Help our customers to reduce their
environmental impacts/ vulnerabilities
• Helping customers to understand more about climate
change
• Helping them make more informed decisions about
– Energy efficient and low carbon products
– Environmentally responsible ways to access our services
– Recycling and waste disposal
• And providing or supporting services for
– Reduced consumer packaging waste
– Recycling and end of life product disposal
8. Help our suppliers to reduce their
environmental impacts/ vulnerabilities
– Working with our suppliers to understand better
• The carbon footprint of their production systems
– And to offer products that
• Have a lower carbon footprint/higher energy efficiency
• Are more sustainable
• Have the most sustainable, and minimum effective,
packaging
Editor's Notes
Sustainability has four pillars: Economic Social Environmental, and Natural resources So for a product to be considered truly sustainable its production and processing, transport, retailing, use and end of life disposal all need to have positive, or at least minimally negative, social, economic and environmental impacts without destroying or needlessly depleting natural resources. This holistic approach does of course introduce a degree of complexity both in measuring and managing sustainability, and in communicating with customers. And for some products different aspects of sustainability come to the fore, so UK consumers are concerned about: Child and forced labour, fair wages and safe working conditions in agriculture and the clothing and leisure goods industries; FairTrade conditions for many tropical fruit and vegetable products, tea, coffee, chocolate, and even wine; Pesticide use and organic production of many foods and natural products and avoidance of pollution in manufacturing; Conservation of rainforests, fish stocks and water resources – and even soil conservation among officianados. Climate change has brought two particular measures of sustainability to the fore: Carbon, and Water.
How do customers view retail performance on sustainability? A recent survey suggested retailers fair relatively well in the public’s eyes in the UK, whether compared to other sectors or to government. But the sector has not yet satisfied customers in all respects and the usual British consumer’s cynicism about large corporations coloured some of the opinions given in this survey – some of the leading supermarkets were considered both the most and least likely to deliver sustainable services! So, despite not being identified by the UK’s Carbon Trust as a vulnerable sector in their analysis of which companies needed to take urgent action on climate change, all the UK supermarkets and many other retailers are putting a good deal of effort into demonstrating their own sustainable credentials and sourcing products that satisfy customer demand, while at the same time differentiating themselves within the overall agenda, for example: Sainsbury’s were responsible for nearly half of all UK FairTrade sales, by value, in 2007; Asda Wal*Mart has pledged to send zero waste to landfill by 2010 and may even achieve this a year early; Tesco has launched a comprehensive ‘green’ programme, sourcing energy efficient products at prices all customers can afford and launching the first carbon label; The Co-op no longer stocks beverages unless they are FairTrade, generates its own renewable energy through solar panels on its HQ building and a wind farm on its agricultural holdings; Marks and Spencer launched Plan A with 100 action points on sustainability issues; Waitrose undertakes development projects with its suppliers in S Africa, including capacity building and transferring understanding of its own unique ownership model, with all staff being partners in the business. However, the sector, as well as external stakeholders surveyed by MORI, recognised that sustainability cannot be achieved by a single retailer in isolation. Where supply chains, infrastructure, legislation or just mind-sets need to move to a new way of thinking and doing, collaboration is essential. At the BRC we decided that the initial focus of our efforts on sustainability would be climate change.
On 30 April this year we launched our climate change initiative ‘A Better Retailing Climate’. It is a sector-wide, voluntary initiative setting goals over the next 5 years. It embraces all types of retailer, large and small, food and clothing, DIY and toys, health and beauty and electricals. It endeavours to manage the main risks associated with climate change – reputational, regulatory, operational, business model and litigious. It’s aims are three-fold: Sending a strong clear signal to our partners in government and the supply chain so we can remove barriers to developing a low carbon economy; Setting out a clear agenda for action, addressing the priority issues and asking stakeholders to bear with us on other sustainability issues for the time being while we focus resources on these very urgent issues; Providing a framework for those retailers who are just starting on pro-active environmental management. Leadership on climate change issues is essential and we have seen certain brands give a strong lead in this area, but the climate change challenge means EVERYONE must act. We shared this initiative with EU colleagues on 3 June as the UK market alone will not be able to lever change in some markets.
We have 5 overarching goals, supported by 21 aspirations. I will go into more detail of the first and third goals about shortly. We must not forget that climate impacts on us and our businesses, as well as our businesses having effects on the future climate. So, for instance, security of supply in increasingly volatile weather will necessitate more diverse supply lines. It may even mean sourcing from entirely different places! Retailers may need to locate their stores in areas with lower flood risk, with implications for local communities, or design them differently – for example, the summer of 2003 was exceptionally hot across Europe, but will become the norm in the next 20-30 years. Our stores will need to cope with higher temperatures without recourse to ever-increasing air conditioning and higher carbon footprints. Ensuring sensible and proportionate regulation in a public policy area where the precautionary principle applies will be challenging. We need clear and consistent regulatory signals but we also need to accept that as the scientific evidence base evolves there are going to be ongoing changes to the regulatory environment, internationally and at national level. It will be essential to achieve a resilient framework setting out the required outcomes, leaving business and society to respond in the most appropriate ways given their circumstances, business models and evolving technology. We also need to ensure that existing regulations are revisited so that a consistent approach is taken – something that has yet to be achieved in either the UK or EU, to date. We will be reporting on our delivery against these goals on a sector-wide basis each year. We will work with a third party to ensure that there is some form of validation to offer stakeholders assurance that this will not contain ‘greenwash’. Our report will identify where we are not making as much progress as we hope, why this is the case and what we are doing to rectify the situation – including who we are working with if the barriers are regulatory or due to lack of infrastructure, for example.
Retailers recognise that they need to demonstrate to their customers that they are playing their part in tackling climate change. Until recently the public in the UK have expressed concern over climate change but looked to the Government and business to spearhead action to tackle it. Taking a base year of 2005, we aspire to reduce emissions by 15% by 2013, in like-for-like terms. This is in line with the UK Government’s targets for 2020 of 26-32% emissions reductions. Our aspiration to reduce back-of-store waste going to landfill – the usual method of disposal in the UK – to less than half by 2013 is also in line with the Government’s waste strategy. We know that individual retailers will exceed both of these goals by a considerable margin. But our initiative covers the whole sector and for some these will be testing targets – we are not prepared to over-promise for short term PR effects, we would like to be in a position to over-deliver for long-term substantive gains. Water is the new carbon. This is particularly true in London and the South East – the per capita availability of water in London is less than in Jordan and it is said that the average glass of water has been used by 6 other Londoners previously! Most retailers use relatively little water – largely for ‘domestic’ purposes. But on the basis that what gets measured gets managed, we are pledging to install water meters at major use sites so that future usage can be reduced.
Customers are at the heart of our initiative. More and more of them want to do the right thing but are confused as to whether they should buy local produce or organic, whether food miles indicate carbon footprint, how carbon embedded in production compares with carbon emitted in use. Work undertaken by the UK Government’s Department of Environment, Food and Rural Affairs on ‘roadmapping’ a number of products shows that around 70-80% of dairy and meat products’ footprint is attributable to the production phase, whereas 70-80% of emissions are associated to the usage phase of electrical goods – and also clothing, where washing is the major cause of emissions. (Please don’t tell my teenage sons!) Retailers are working with the British Standards Institute and the Carbon Trust to develop PAS2050, a carbon footprinting standard which will enable them to understand the supply chain and work with their suppliers. Some retailers, most notably Tesco, are even considering labelling products so that consumers are making their own choices. Tesco launched the first areas of product labelling in April 2008, including choices of potatoes, orange juice and laundry powder. They are using this to understand what customers want to know, including top tips and comparisons with ‘typical’ values for that product.
The biggest area for collaboration is with suppliers, marking a development of existing relationships rather than a complete new beginning. Discussions are likely to cover: The way the product is grown and processed and the implications for emissions, water and chemical use, labour treatment and safeguarding of natural resources; Storage and transportation options; Packaging and labelling choices; Customer and point of sales information; Re-use and recycling issues. All of this implies a closer and long term relationship with suppliers, working together to meet customer needs and demonstrating the benefits of the approaches taken.
‘ A Better Retailing Climate’ embraces the full range of retailing sectors, demonstrating the need retailers recognise in reassuring customers, strengthening and safeguarding their brands. All 7 of the major supermarkets in BRC membership have signed up, representing around two thirds of all groceries sold in the UK. While the current difficult economic conditions are affecting non-food retailers adversely, consumers are increasingly aware of the health and environmental concerns associated with their food. Recent trends will not reverse or simply fade away. Indeed it is arguable that for those households without constrained budgets, sustainability will become even more important as an issue. And we expect even more household brand names to be associated with ‘A Better Retailing Climate’ over the next few months, as well as increasing numbers of independent and specialist retailers. We would welcome the opportunity to work with FIBS and your members as we take this work forward.
