My colleague Luke Ritchie and I attended the National Retail Federation conference earlier this year, and it was very evident that from retail leaders that Environmental, Social and Governance (ESG) strategies are now key considerations for customers and employees alike.
Companies should prepare for sustainability to become the expectation and not the exception in the future.
While businesses are already expected to do business sustainably, it’s fine tuning these strategies into actionable and transparent initiatives that remains a challenge for many. For some the cost and time required to implement these strategies is a consideration but the real question is, can your business afford not to act?
According to The Global Sustainability Study 2021 (conducted in July 2021 by Simon-Kucher & Partners), one third of consumers are willing to pay a premium for sustainable products, and over 60% of consumers include sustainability considerations when making a purchase.
Given these findings, it’s no wonder that some of Australia’s biggest retail brands are already taking action.
Last week we saw the announcement from Coles Supermarket on a $10m partnership with the Great Barrier Reef Foundation to help strengthen the regeneration of the coral reef system.
Coles has been ranked the number one food retailer in Australia for sustainability – and second across the globe (World Benchmarking Alliance’s (WBA) 2021 Food and Agriculture Benchmark). This is one of many initiatives that Coles is working on as part of its ‘Together to Zero’ sustainability ambitions.
In April this year, David Jones announced its partnership with re-commerce platform RELOOP and GlamCorner. The initiative means that David Jones customers can now resell, rent, recycle and repair their clothes.
This idea of reuse and recycling clothes has also been part of Kathmandu’s sustainability focus. The company launched a new version of its highest selling puffer jacket - the BioDown jacket, a bio-degradable item.
Chief Executive of Kathmandu, Reuben Casey said that puffer jackets provided the company with its best opportunity to make a difference because “every 10 minutes 6000 kilograms of textile waste ends up in Australian landfills,” Casey says.
On the international stage, global giant IKEA continues to lead the way with its 360-degree approach to sustainability. Not only does the Swedish furniture business allow its customers to re-sell its products, IKEA owns its own wind and solar farms, its buildings are powered by green energy and its focuses on supplying affordable and sustainable products.
We are also starting to see other companies creating innovative ways to be transparent to their customers. Doconomy is a credit card company that will only allow its users to purchase products up to a certain carbon limit. They’re leveraging something tangible that most of us have – a credit card – to help educate and drive positive change in the climate.
The other is Asket – a fashion brand that has introduced an ‘impact receipt’. Listing out the true environmental cost of the customer’s purchases, giving the owner transparency on how many wears it will take to make it carbon neutral.
What is clear is that this shift will only continue. As we start to see Millennials move into controlling more business decisions and the younger generations entering their prime spending and working years – their heightened ESG interests and values will influence where they want to work and what they want to buy.
If you want to discuss how to define and/or operationalise your ESG strategy for your retail business, please get in touch.
