Building a Sustainable Supply Chain for the Retail Industry

The challenges of today’s world require businesses to develop sustainable solutions to reduce the negative impact on the climate and implement business practices based on compassion and respect.

As countries move forward on their pledges to fulfill the Paris accord, the retail industry can do a lot to improve sustainability and move toward a circular economy. Many retailers worldwide have embarked on the journey to reduce their carbon footprints and improve their environmental, social and governance (ESG) scores.

Global giants like Coca-Cola, Johnson & Johnson, Ikea, Levi’s and many more are well on their way to sustainability and have set targets like recovering 75 percent of the plastic bottles introduced in the market, sourcing their energy requirements through renewable sources, reducing their water usage and looking at sustainable packaging.

Typically, achieving ESG objectives requires a comprehensive approach that covers the entire supply chain or supply network. It is imperative for retail companies to embed sustainable practices across each of their vendors or suppliers right from the start till the end.

Importance of retail sustainability

The retail industry is one of the largest users of plastic for packaging products, with 40 percent of the total plastic used in the world. Moreover, there is still a long road ahead for the industry to develop sustainable solutions that can enable it to reduce its share of global emissions, which currently stands at a staggering 25 percent.

That said, consumer behavior is also changing, with customers in many countries willing to move away from brands that do not prioritize ESG goals.

As retailers work on reducing waste and its impact on the environment, they are exploring other avenues available to improve and diversify their supply chains. Diversifying also helps retail companies mitigate risks from natural disasters, prevent damage to their reputation and save costs on unwanted downtime.

As customers become more conscious about the brands they buy, they become much more aware of the vendors that work with those brands and whether they support sustainability, good working conditions, timely and fair payment of wages, etc. This is important for a brand to maintain its reputation and growth. In addition, good governance and accountability are key for sustainable transformation.

Steps involved in retail sustainability

Retailers should prioritize sustainability in their corporate strategy, and leadership must be involved and accountable for the same.

Businesses of all sizes and categories can initiate their journey toward sustainability by taking a few simple steps:

1) Embed sustainability in everyday retail by shifting toward more energy-efficient lights, appliances and other equipment; try to go paperless, as there are many avenues available today to go digital; try to minimize trash and reuse things to the maximum extent possible.

2) Moving away from traditional packaging to a more sustainable alternative. Packaging is an essential expense but also has the biggest impact on the environment. Retailers should focus on 3Rs – reduce, reuse and recycle to make their packaging eco-friendly.

3) Help customers become conscious of sustainability by educating them on how to reduce their carbon footprints.

4) Say no to ‘greenwashing’. Making commitments to sustainability is easy, but without the hard work necessary to actually meet those targets, the brand image boost will be short-lived and damage the business in the long run once the reality gets uncovered in ESG audits.

How can you make sustainable retail a part of your brand?

To become a sustainable retail brand, it is important to be vocal about the initiatives your company is taking toward sustainability. Customers need to be made aware of the benefits they or the environment stand to get by supporting your business.

It is also important to communicate and focus on the long-term benefits of all your sustainability efforts for the planet and customers. Content marketing can play a crucial role here with answers to questions like the long-term targets for becoming sustainable.

How does the business support a particular cause? How can the company improve the product or consumer experience through sustainability efforts, and how do these efforts link back to its long-term strategy? Answering these questions is a first step on the journey toward sustainability.

Conclusion

End consumers are becoming increasingly aware of sustainable principles and can trace how sustainable practices can impact businesses and the environment. Embedding sustainability across the value chain is critical for businesses to show customers that they are serious about tackling ESG issues and to reduce costs and mitigate risk in their supply chains. In the long run, sustainability is a win-win not only for retail brands but also for the planet.