Sustainability is fast becoming an expectation of today’s consumers.
As the climate crisis pushes more people to examine their consumption habits, and issues like sourcing, manufacturing, and reuse/recycling become better understood, merchants are faced with a mandate to operate more sustainably.
Doing so involves much more than simply carrying sustainable products. A truly sustainable supply chain involves issues ranging from carbon footprint and air pollution to deforestation and water use--in addition to human rights challenges like the use of child labor and worker safety.
What goes into making a product is often the focus of consumer scrutiny, but truly sustainable retailers go much further--evaluating and offsetting the energy usage of their stores, factories, and offices; streamlining logistics to have a smaller carbon footprint; rethinking packaging and shipping materials to be less resource-intensive; and much more.
The sustainability journey can seem daunting, but it’s an important one. Not only do sustainably-minded companies outperform their peers, but they play a critical role in the future of our environment and earth. Read on for insights to help you implement sustainable supply chain practices in 2021 and beyond.
1. Understand your current impact
Ninety percent of a consumer company’s environmental impact (on air, land, water, biodiversity and geological resources) and 80% of greenhouse gas emissions comes from its supply chain, according to McKinsey. These impacts carry significant social and environmental costs, which can be reduced by improving supply chain sustainability.
Before making any progress, of course, retailers need to understand those impacts--recent research found only one-fifth of respondents have conducted a “comprehensive review of their supply chains’ sustainability performance,” and more than half were unable to determine sustainability issues within their supply chain. Working with organizations like Carbon Disclosure Project (CDP), The Sustainability Consortium (TCS), Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), and World Wildlife Fund can give retailers a sense of where to start, what to evaluate, and how to improve.
2. Choose suppliers wisely
One key way to reduce impacts, and thus costs, is by working directly with suppliers (whether an energy provider or logistics company) to manage and eventually reduce risks. It’s easier for larger retailers to have these conversations about sustainability with suppliers, of course, but merchants of any size should at least research the practices of the “links” in their supply chain. Ending contracts with suppliers that don’t have solid sustainability practices sends a message, and the more small businesses gravitate toward environmentally-conscious partners, the quicker change will happen.
Merchants of all sizes should ask pointed questions of their suppliers, including whether they subcontract work out to other entities. A supplier might look sustainable on paper, but fail to practice strong oversight of subcontractors. This is especially important in the apparel and fast-fashion sectors, which demand high volumes of product produced in tight windows.
3. Identify issues and set goals
A sustainability overhaul takes time--often years. Thus, it’s critical to start by pinpointing issues a retailer can take action against over the short- and long-term. Increasing the recyclability of packaging materials might be as simple as changing suppliers, while reducing the carbon footprint of manufacturing practices is a much larger investment of time and capital.
A tiered approach is wise, starting with quicker wins that can be addressed in a shorter period of time. Longer-term goals should be broken down into achievable steps.For larger retailers, this level of integration and transparency can result in medium-term financial impacts, such as increased interest from ESG-focused investors, consumer demand, or tax breaks.
4. Communicate your intent and impact
When it comes to sustainability, action always comes first. Merchants on a sustainability journey will be eager to let their customers know, but there must be a “there there.” Meaning, consumers are quick to dismiss brands that claim to be sustainable without demonstrating clear impact. That’s why it’s vital to tackle more achievable environmental issues first, while demonstrating incremental progress towards more challenging goals. With this, it’s also important to bring customers into the sustainability journey.
Invite them to recycle your shipping materials, or be creative in how products are reused at the end of their useful life. Share stories from across your supply chain--such as the farmers or artisans behind your products, or the workers and factories implementing sustainable products. After all, it is individuals like these who are having the true positive impact--and their efforts deserve a spotlight.
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