Emission critical: the retail industry’s race to net zero

The retail indus­try is among the UK’s biggest con­trib­u­tors to glob­al warm­ing. The British Retail Con­sor­tium (BRC) has acknowl­edged that the sector’s annu­al green­house gas emis­sions are 80% high­er than those of all road traf­fic in the coun­try.

The indus­try impos­es its hefty car­bon foot­print through­out the val­ue chain, from the upstream emis­sions of farms and fac­to­ries all the way down to the ener­gy used by cus­tomers to pow­er their pur­chas­es. 

Clear­ly, every­one relies on retail­ers to sup­ply them with the essen­tials of life and more, and the sec­tor is a huge employ­er and con­trib­u­tor to GDP. But the Unit­ed Nations’ COP26 cli­mate sum­mit last month rein­forced the need, if it were not already clear, for urgent action to keep glob­al warm­ing to 1.5C below pre-indus­tri­al lev­els to stand a chance of sav­ing humankind from the worst effects of cli­mate change.

It’s not as though the indus­try has been sit­ting on its hands – far from it. For instance, more than 70 lead­ing retail­ers have com­mit­ted them­selves to fol­low­ing the BRC Cli­mate Action Roadmap. This aims to bring the CO2 emis­sions of the indus­try and its sup­ply chains down to net zero by 2040. The plan has three key decar­bon­i­sa­tion mile­stones: stores by 2030, deliv­er­ies by 2035 and prod­ucts by 2040.

In addi­tion, the CEOs of five super­mar­ket chains – Co-op, Marks & Spencer, Sainsbury’s, Tesco and Wait­rose – have signed up to the World Wide Fund for Nature (WWF) Retail­ers’ Com­mit­ment for Nature. They are work­ing close­ly with the WWF to reduce the envi­ron­men­tal impact of their oper­a­tions by half before 2030, focus­ing on aspects such as agri­cul­tur­al meth­ods, food waste and pack­ag­ing.

But more big retail­ers need to “come on board, so con­sumers can be con­fi­dent that they aren’t inad­ver­tent­ly fuelling the cli­mate cri­sis or the destruc­tion of nature when they shop”, stress­es Dr Mike Bar­rett, the WWF’s exec­u­tive direc­tor of sci­ence and con­ser­va­tion. 

Chris Stark, CEO of the Cli­mate Change Com­mit­tee, the inde­pen­dent expert group that advis­es the gov­ern­ment on emis­sions pol­i­cy, agrees. “Retail­ers have a real oppor­tu­ni­ty to offer the low-car­bon prod­ucts and ser­vices that are inte­gral to the net-zero tran­si­tion,” he says.

So what more should retail­ers – SMEs as well as the big high-street names – be doing? What does best prac­tice look like? 

In the run-up to COP26, the gov­ern­ment issued guid­ance to retail­ers on its UK Busi­ness Cli­mate Hub that makes numer­ous rec­om­men­da­tions. Retail­ers should, it says, respond to grow­ing con­sumer demand for sus­tain­able prod­ucts. They should assess exist­ing prod­ucts and con­sid­er more sus­tain­able options; they should source prod­ucts made sus­tain­ably from recy­cled and recy­clable mate­ri­als, with min­i­mal or no plas­tic pack­ag­ing. 

Reduc­ing pack­ag­ing, or switch­ing to more eco-friend­ly pack­ag­ing, will help to cut emis­sions and plas­tic pol­lu­tion. Sup­pli­ers should reduce non-essen­tial pack­ag­ing when they ship prod­ucts and reuse or col­lect essen­tial pack­ag­ing for recy­cling when they next deliv­er.

Stock­ing prod­ucts made clos­er to home not only sup­ports the local econ­o­my. Local­ly pro­duced goods can also reduce trans­port costs and emis­sions. Retail­ers should think beyond prod­ucts and con­sid­er how they can source local­ly for oth­er items, such as shop fit­tings. And, cru­cial­ly, stores should be pow­ered by renew­able ener­gy.

Addi­tion­al­ly, shop staff should ask cus­tomers before print­ing receipts. It’s esti­mat­ed that more than 11.2 bil­lion receipts are print­ed in the UK annu­al­ly. Most of these use ther­mal paper, which should not be recy­cled because the process would release exces­sive amounts of an envi­ron­men­tal­ly harm­ful chem­i­cal called bisphe­nol A into the air. Till providers should enable receipts to be emailed.

The UK needs to shift away from its cur­rent throw­away con­sumer cul­ture and adopt a tru­ly cir­cu­lar econ­o­my. This requires retail­ers and man­u­fac­tur­ers to put more thought into design­ing prod­ucts made to last, along­side redesign­ing retail sys­tems to enable cus­tomers to exchange, repair and reuse goods.

The recent­ly enact­ed Ecode­sign for Ener­gy-Relat­ed Prod­ucts and Ener­gy Infor­ma­tion Reg­u­la­tions 2021 require man­u­fac­tur­ers to make spare parts for prod­ucts avail­able to con­sumers, aim­ing to extend the lifes­pan of goods by up to a decade. Retail­ers could also run cus­tomer swap-shops or col­lec­tion points for items that are no longer want­ed. Ini­tia­tives such as the John Lewis Partnership’s fur­ni­ture rental scheme need to become the norm, with prod­ucts made to last.

Retail organ­i­sa­tions and envi­ron­men­tal cam­paign groups are unit­ed in call­ing for greater state assis­tance to help retail­ers reach net-zero car­bon emis­sions as quick­ly as pos­si­ble.

The BRC’s direc­tor of food and sus­tain­abil­i­ty, Andrew Opie, says: “Our roadmap is already help­ing the retail indus­try on its jour­ney to net zero by 2040, but we need gov­ern­ment sup­port and coop­er­a­tion.”

Giv­en that the effects of cli­mate change are already hit­ting hard, 2040 is not soon enough for Friends of the Earth. The envi­ron­men­tal pres­sure group’s senior sus­tain­abil­i­ty ana­lyst, Clare Oxbor­row, wants retail­ers in the UK to make an eth­i­cal and sus­tain­able tran­si­tion to net-zero emis­sions by 2030. 

“The gov­ern­ment needs to facil­i­tate this by imple­ment­ing the right poli­cies and incen­tives to make it hap­pen,” she says. “By cre­at­ing new stan­dards to make busi­ness­es oper­ate in line with nature’s lim­its, includ­ing legal­ly bind­ing reg­u­la­tions to dri­ve down cli­mate-wreck­ing emis­sions, the gov­ern­ment can ensure that retail­ers are doing all they can to meet that all-impor­tant 2030 tar­get.”

Leg­is­la­tion requir­ing all retail­ers to act should ensure that no busi­ness would be put at a com­pet­i­tive dis­ad­van­tage and there­fore deterred from adopt­ing a more sus­tain­able oper­at­ing mod­el, Oxbor­row argues. Retail busi­ness­es, large and small, would then be more inclined to coop­er­ate and take con­cert­ed action. 

No one says that achiev­ing net zero in retail will be easy, but indus­try lead­ers and politi­cians have to be bold. The tran­si­tion will be a mas­sive oper­a­tion, requir­ing col­lab­o­ra­tion among retail­ers, man­u­fac­tur­ers, logis­tics providers, con­sumers and gov­ern­ment.

Why three is the magic number for cutting retail’s emissions

A retailer’s scope-three green­house gas emis­sions – those pro­duced by its sup­ply chain and by con­sumers in the process of using its prod­ucts – are typ­i­cal­ly both the biggest ele­ment of its car­bon foot­print and the hard­est one to mea­sure.

Accord­ing to the Car­bon Trust, the retail indus­try can­not devel­op a valid cli­mate strat­e­gy unless it accu­rate­ly accounts for its scope-three foot­print. Yet the reli­a­bil­i­ty of emis­sions report­ing along the sup­ply chain can be dif­fi­cult to ver­i­fy.

Short­en­ing their sup­ply chains and ensur­ing that logis­tics part­ners use green vehi­cles to trans­port mate­ri­als and fin­ished goods are both impor­tant ways for retail­ers to move towards net zero. Insist­ing that their direct sup­pli­ers and those fur­ther up the chain use sus­tain­able mate­ri­als and renew­able ener­gy are also impor­tant steps.

Food pro­duc­tion accounts for a large pro­por­tion of retail’s scope-three emis­sions. This means that super­mar­kets in par­tic­u­lar can make a sig­nif­i­cant impact by offer­ing less and bet­ter-qual­i­ty meat, sup­port­ing more sus­tain­able local pro­duc­ers and reduc­ing the amount of food that goes to waste.