In South Africa, 8 out of 10 consumers want brands to drive change for sustainability, though only 18% of South Africans say they have boycotted a brand for sustainability reasons.
Locally and internationally, sustainability is shaping the retail boardroom agenda, influencing every aspect of strategy through Environmental, Social and Governance (ESG) frameworks.
This focuses on a retail company’s environmental impact and how it manages its carbon footprint. It involves assessing the organisation’s efforts to reduce carbon emissions, energy consumption, waste generation, water usage and overall environmental sustainability.
The social component examines a retailer’s relationships with its employees, customers, suppliers and the communities it operates in.
This aspect includes evaluating employee pay and working conditions, diversity and inclusion policies, supply chain ethics (particularly pertinent within fashion retail), customer data privacy and the company’s engagement with local communities and social causes.
Governance focuses on the structure and practices of a retail company’s management and leadership. So, who is in the boardroom, and who is building resilience within the organisation? It involves assessing the transparency, accountability and integrity of the company’s decision-making processes.
Retailers have a shared and important responsibility to help accelerate to a low carbon economy, but they can’t achieve net zero targets in isolation. To reach sustainability aims, companies are going to need to work in collaboration with suppliers and their wider ecosystem.
By setting science-based targets, retail businesses commit to taking measurable and ambitious actions to reduce their carbon emissions and overall environmental impact. These targets require retailers to identify the various sources of emissions within their operations and supply chains.
This includes direct emissions from owned or controlled sources (e.g. store operations), indirect emissions from purchased electricity, and emissions from the entire supply chain, including manufacturing and transportation.
1. Optimising fleet
Organisations that operate diesel or petrol vehicles will be looking to reduce emissions here. Connecting their existing fleet vehicles and leveraging data analytics to optimise these based on idle times and route guidance is a good starting point.
2. In-store
There are opportunities to reduce energy use across retail stores, warehouses and distribution hubs which will help to reduce a retailer’s emissions. Developing scalable network and security blueprints to enable retailers to seamlessly and securely connect their buildings to the cloud will help them get ready for optimisation and decarbonisation.
This includes providing both IoT (Internet of Things) sensors for a better and more sustainable workplace and computing at the Edge to run artificial intelligence (AI), which has the ability to drive energy and carbon savings.
3. Data centres
With the right partnerships, retailers can decarbonise their servers and data centres. Using AI to intelligently learn server power usage patterns and propose (open loop) or automatically trigger (closed loop) actions to adjust power consumption, for example, can enable more efficient server workload management without compromising operations or the quality of service.
As part of the journey towards achieving net zero, retailers will be grappling with baselining and reducing the carbon footprint across their supply chain, including ICT products and services. These emissions can easily account for upwards of 80% of a retailer’s overall carbon footprint and reducing emissions across all suppliers is key.
1. Sustainable network refresh
Establishing the baseline carbon impact and identifying carbon hotspots within their digital infrastructure estate is a key starting point. From here, retailers can optimise their digital infrastructure estate by bringing visibility on estimated energy and carbon use and potential opportunities for optimisation, which will lead to both potential financial savings and carbon emissions reduction.
2. Employee travel emissions
Retailers will also have to reduce the carbon footprint of employee commutes. Retailers should formulate strategies around leveraging the future of the digital workplace to minimise the necessity for employee travel.
There’s an important role for 3D technologies, such as Augmented Reality (AR) and Virtual Reality (VR) in the metaverse, to play in powering the future of travel – a future where hybrid working isn’t just Microsoft Teams.
3. Supply chain emissions
It’s important that organisations ask themselves how they are securely connecting and managing the data that’s going across their supply chains. Retail businesses could ask each supplier to assess their emissions or may want to leverage an ERP (Enterprise Resource Planning) system to collect data to baseline supply chain emissions.
The pace of digital transformation and the need to implement the latest technology solutions seamlessly and securely, at scale, can be a daunting prospect for many retail businesses looking to improve their sustainability credentials.
