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The retail industry continues to grow revenue yearly, with sustainability on its agenda. A 2023 global retail industry survey by Deloitte indicates that 73 percent of retailers have increased investments in sustainability.
E-commerce retailers are leading the industry, with some using physical outlets that provide unique brand experiences. Climate change remains one of the critical issues facing the retail sector, among others, and therefore, embedding sustainability across the retail industry is vital to ensure continued growth and innovation.
There are three main areas where industry players are paying particular attention to their sustainability journey. These are achieving their net-zero target, building sustainable supply chain operations, and complying with environmental, social, and governance regulations.
There is also the use of technology to enable sustainability practices across organisations, including building a sustainable marketplace.
Achieving net-zero goals requires retailers to perform the following:
Transition to renewable energy sources to reduce emissions that also includes efficient use of energy across the operations.
Organisations have also applied energy-efficient machinery, technologies and equipment to reduce emissions. They must evaluate their path to net zero early to determine the activities contributing to their goal. Another aspect for retailers is building sustainable supply chain operations, which is essential to avoid disruptions to their business that could affect their future viability and competitiveness.
Sustainable supply chain operations include developing sustainable products and services that are insulated from traditional market shocks and provide new avenues for growth.
Organisations are also reviewing their suppliers and business partners to ensure that they meet specific sustainability standards and promote sustainable sourcing. A big area of focus also has been the adoption of circularity or circular economy principles to ensure efficient resource utilisation that reduces waste.
They must understand the link between reducing supply chain emissions (scope three emissions) and achieving their net-zero goals. This link makes building sustainable supply chain operations critical to sustainability in the retail industry.
Finally, stakeholders are increasingly demanding sustainability reporting from retailers with different reporting frameworks, such as the IFRS sustainability disclosure standards, the Global Reporting Initiative and the integrated reporting framework, to name a few.
Therefore, retailers have to prepare to meet this demand to ensure compliance.
Organisations should also consider using technology to fulfil their sustainability reporting obligations.
Akinyemi Awodumila is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.
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