The retail industry must 'work harder and faster' in order to deliver on climate change commitments, according to a study by Boston Consulting Group (BCG) in partnership with the World Retail Congress.
Its report, Sustainability In Retail Is Possible–But There’s Work To Be Done, found that while sustainability is a strategic priority for retail businesses the vast majority were failing to make meaningful progress.
The report was presented at the World Retail Congress, which is taking place this week in Rome.
BCG polled 37 major retail businesses around the world, including grocers, fashion firms and those selling homeware and electronics, with annual revenue ranging from $1 billion to $500 billion.
According to BCG, the findings revealed widespread understanding of the competitive advantages to winning in sustainability, including: a competitive edge over rivals, cheaper borrowing, lower costs, attracting new customers, and retaining employees, as well as the potential for tapping into new revenue streams.
The survey also found that the companies were 'nearly unanimous' in believing that sustainability initiatives would drive value in the next five to ten years and half of the respondents believed their companies would invest 'whatever it takes' to reach their goals.
Lack Of Progress
However, the findings revealed that 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 their 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.
In addition, 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.
Some companies are stuck at 'sustainability basics', simply doing enough to comply with regulations and meet the minimum expectations of investors and other stakeholders.
“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,” commented Shalini Unnikrishnan, a managing director and partner at BCG, and a co-author of the report.