Photo: Whole Foods
Can retailers wait any longer for government to move on climate change?
The Retail Industry Leaders Association (RILA), a group representing the largest retailers in the U.S., has come out in support of the goals outlined by President Joe Biden to cut the nation’s greenhouse gas emissions in half by 2030.
Mr. Biden made the announcement at the Leaders Summit on Climate that is being billed as a milestone ahead of the UN Climate Change Conference to be held in November in Glasgow, Scotland. The President has pledged to go big on addressing one of the biggest threats facing the world as agreed upon by the vast majority of scientists, national security experts and business leaders. He has also made addressing this issue a key component of his infrastructure and job-creation plans.
“President Biden’s commitment to combating climate change is an important step in reclaiming America’s leadership role in addressing one of the most serious threats to our future,” said Erin Hiatt, vice president, corporate social responsibility of RILA. “To protect our global community, the United States must do its part and work collectively with other countries, industries and individuals to avoid climate change’s most disruptive effects.”
“Leading retailers know the intricacies of navigating complex relationships and operational realities in the pursuit of sustainability,” said Ms. Hiatt. “We urge the Biden administration and members of Congress to collaborate on bipartisan legislation that supports innovation, economic resiliency and energy efficiency to help the United States prepare our economy and workforce to meet necessary emissions reductions.”
Earlier this week, RILA released a report outlining its priority for achieving reductions, encompassing transportation, buildings and facilities, clean energy and waste.
On the transportation front, retailers are urging the government to provide support or incentives to minimize the associated costs tied to transitioning supply chain fleets and the associated infrastructure to make them work. RILA has pointed to the need for utilities to “work alongside fleets, regulators and manufacturers among others to identify cost-effective, reliable development solutions.”
One of the recurring themes in RILA’s report is the need to develop “sensible transition” policies that will not penalize retailers, particularly when it comes to technologies that have not yet been fully developed or in a stage of development that can be easily scaled.
RILA has not gotten behind a specific legislative solution to address climate change at this point.
Discussion Questions
DISCUSSION QUESTIONS: What do you see as the biggest implications for the retail industry going forward should the government fail to aggressively address climate change at this point in time? Where do you see the best opportunities for the industry to contribute to a reduction in greenhouse gas emissions and what do you think are the paths to getting there?
Poll
BrainTrust
Every business has a responsibility to help protect the planet for future generations and, with the growing portion of customers that are concerned about the environment, retailers need to be more proactive rather than just waiting for legislation to force them to evolve.
Business cases I saw a decade ago for becoming more sustainable were not particularly attractive unless you built your brand on it (Patagonia, etc.), but today the ROI from most initiatives simply make good business sense. Furthermore, employees are also increasingly concerned and motivated to contribute, so the time is right for brands that have just been green-washing (or doing little) to get engaged.
Yes, a decade ago green initiatives in energy were too costly. Today they are less expensive than reinvesting in carbon-based energy. Imagine the improvements in the next decade.
Government leadership should have no bearing on the climate improving activities of the retailers. If RILA supports the issue, I expect they are speaking for retailers. The climate is both a large and small problem. It cannot be fully solved only by government actions. But if the government fails that doesn’t mean every thing that companies have been doing and should do in the future should stop. Companies made significant strides over the last four years when the government not only wasn’t supportive of climate issues, but actively fought climate improvement.
Just in terms of energy, green alternatives are already surpassing carbon alternatives in cost. Imagine the amount of improvement that will be made over the next, 10,20, 50 years. For years I have been writing that in the 21st century the country that develops the most efficient and least expensive energy alternative will be the country of the century, as the U.S. was for the 20th and Britain was for the 19th. The same dynamics go for companies.
Good for RILA!
I will say that a national policy would be helpful, but is not necessary. National policy on COVID-19 was abysmal, and states and counties were left to fend for themselves and they all made different choices. Rather than try to navigate the morass, retailers made their own national policies. Makes life simpler.
I think this is a “pull” situation. Consumers want to see something done. The fashion industry is all over it. Walmart is all over it. Others must follow suit, and they will.
A national policy would certainly be helpful, but market forces are strong for this one.
Adapting to new consumption habits is the biggest industry implication.
Consumers increasingly demand sustainability. More consumers participate in the circular economy for furniture, apparel and baby items to give old products new life. Shoppers also opt for sustainable packaging to minimize plastic production and incineration.
The best opportunities for retail responsiveness include climate-friendly transportation, like electric vehicles, and sustainable packaging like glass, cardboard and biodegradable innovations.
…and the hardest!
Like many other businesses the killer here is uncertainty. Governments of all kinds tend to procrastinate or make what seems to be “the right decision” without understanding the overall consequences. (Law of unintended consequences). Having a long-term view of how regulations might change would be hugely useful to long-term planning. Some organizations make a judgement on what they believe will be coming in the future – this may be something that factored into Amazon’s commitment to buy 100,000 electric delivery vehicles.
Consumer power is arguably much more powerful than a government could ever be. There is anecdotal evidence consumers are choosing companies based on the values they share and environmental impact is one of these. Based on this, examining consumer feelings could well be much more appropriate – with only minor tweaks required to meet government set legislation.
Whether the government fails to aggressively take action or how retail addresses its contribution to carbon emissions, everyone needs to start making changes.
Retailers are more aware than ever of how their practices are harming the planet. Nike and Lululemon are great examples of brands thinking about the product lifecycle and adding circularity to their business models. A great start. But it’s not enough.
Consumer awareness and literacy regarding impacts of retail on the climate is the responsibility of the consumer. we live in a world where over-consumption is normal.
We need to push governments and leaders on standardizing sustainability metrics. If there are 456 sustainability certifications in existence today, how can consumers ensure the claims are legit? If we are not using the same tools to measure the impact of brands on the climate, how can we truly make better choices?
The fact is no one should wait to make changes.
Retailers need to reevaluate their impact on the climate. Now.
Consumers need to get smarter. Now.
The government must push for change. Now.
For those of us in the business of creating, manufacturing, selling, and distributing apparel, it is important for us to recognize the impact the apparel industry has on the global environment. In reality, the apparel industry and supply chain are a massive polluter. Spurred by over a decade of “fast fashion”, our industry now faces the consequences of decades of overindulging in product creation. Product creation is the mega contributor and driver of waste in the apparel industry. According to Statista, “The global apparel market is projected to grow in value from 1.5 trillion U.S. dollars in 2020 to about 2.25 trillion dollars by 2025.”
So how does the apparel industry reduce pollution? Know your customer. What? Yes, know your customer. Stop chasing customers by building more and more products. It is not a mystery what your customers like and do not like. Look at the products your customers return. All retailers have a plethora of untapped intimate knowledge of each individual customer’s personal preferences in apparel — purchase history sitting in untapped purchase history silos. Seeking patterns in your data will not solve for individual customer personal preferences in the clothes they like to wear on their body! Which, by the way is completely subjective to you, yes — you absolutely know how you like your clothes to fit, look, and feel as you wear them on your body.
The technology exists to tap open the reams of customer preference intelligence locked in your data silos of purchase history. The bottom line, create targeted products based on customer preference intelligence. The ripple effect starts with designing fewer products, reducing waste in the supply chain, reduced transportation costs, reduced return rates hovering in the 40% + range, reduced environmental costs of reverse logistics including the burning and dumping of apparel returns, and much more. Including ROI. Happy customers.Know your customer. It is time we band together as an industry and stop waste in our industry. Thank you for reading and I look forward to your comments.
To paraphrase Mike Tyson, “everyone supports a plan, until the details hit you in the face.”
It’s hard to imagine any progress without some kind of coordinated action, but it’s equally hard to imagine the latter with, oh, I don’t know, six or seven billion different sets of priorities competing for space, or even the few hundred that we might succeed in whittling those down to. But I’m sure jetting off to Glasgow will be a good start 🙂
Postulate #1: No entity has a natural right to extract profit from the planet by damaging its environment.
For centuries, this reality has been ignored in the name of economic progress and value-creation for the few. As humanity has scaled, the cumulative impact now looms large, and we all must pay if we want the planet to survive.
Retailers have a unique opportunity in this regard because they serve virtually the entire population. The decisions the industry makes can have a real impact on bettering environmental health.
Fours areas stand out: products, packaging, transportation and energy. There are economic and moral benefits for improving each of these.
I’d like to re-state my position on the last factor — a colossal overlooked asset. Retailers collectively have millions of acres of mostly-empty flat rooftops that are exposed to solar energy. In many instances they absorb heat that requires electrically-powered air conditioning to cool the spaces beneath. Covering available retail roof space with photovoltaics has the potential to turn stores and distribution centers into net positive energy producers while shading the buildings in the bargain. This adds local resiliency to the electrical grid (hear me, Texas?) and creates an energy surplus that improves retailers’ bottom line.
RILA is d*#n right that sustainability change is needed now. I only push back on the assertion that the transition must go at a measured pace. I believe radical action is a necessity — as should anyone who wants a good quality of life for their grandchildren.
Why do retailers need to wait for the government at all? If they believe their carbon footprint is negatively impacting the environment, they’re free to move forward on their own right now.
The only reason they don’t is they don’t want to bear the cost. They want the government (i.e., the taxpayers) to bear most of the burden, hence the talk of “incentives.”
The U.S. was one of the few countries to meet the targets of the Paris Climate Accords and we weren’t even party to it. Now President Biden has added the country back in and it will be U.S. countries (again, taxpayers) who will pay for the rest of the world’s inability to rein in their own pollution.
China is one of the biggest polluters in the world. Real “climate change” would start with addressing their lack of action. The U.S. has made monumental strides over the past few decades, largely without the heavy costs on the economy climate activists would impose. And today, with consumers more environmentally aware, retailers should step up and do the right thing and reduce their own waste and pollution without waiting for the government to tell them to act or demanding taxpayers pick up the bill for their failures.
Every time I receive a package from Amazon, I ask myself if there isn’t a better way to ship products and reduce packaging waste. Recycling printer cartridges makes me think about how when our printers break or it becomes harder to find the needed ink, we throw them out and buy a newer edition. We have become accustomed to a “use and discard” way of life.
There are baby steps that each retailer could take if, as someone else on this thread stated, they place value on that behavior as part of their brand promise. Having an industry organization advocate for change can leverage the power of many retailers, but in the interim, each retailer should examine its role in climate change and find a few baby steps to get started.