In today’s world, there is a growing focus on sustainability in retail, and more and more companies incorporating sustainability principles into the very core of their operations. They are setting standards for Environmental, Social and Governance (ESG) in retail performance.
ESG top companies are taking this a step further and formalising their commitment to sustainability in retail with Triple Bottom Line (TBL) reporting – this means that when reporting on their business to stakeholders, they focus not only on profit, but also on the other two ‘Ps – people and planet.
Sustainability in retail has a high level of focus, and 90%* of businesses either have or are planning their strategy. This focus is driven in large part by the changing demands of their consumers – shoppers actively want to buy from sustainable retail companies, and 60%** are willing to pay more for ‘responsible’ products. So when it comes retailers’ sustainability initiatives, becoming known as an ESG brand is not only a question of ‘doing the right thing’ but it make sound business sense as well – ESG top companies are more attractive to investors (66%+ consider ESG when investing) and can save costs to improve their bottom line.
When it comes to implementing strategies for ESG in retail, businesses have a ‘secret weapon’ already in place – their retail POS systems. Technology is an enabler for retail, driving efficiencies, customer engagement and profit. But it can also be a way to implement practices that help retailers to achieve their ESG in retail goals. Let’s look at some of the ways that technology can enable sustainability in retail:
Forward thinking brands, driven by consumer behaviours, are highly focussed becoming sustainable retail companies. They also understand and rely on the benefits of technology in their business. Now is the time for these two strands to converge to deliver retailers’ sustainability initiatives, with retailers using the power of technology to help them achieve what the market is demanding – an even greater focus on ESG in retail.
What is ESG?
ESG stands for Environmental, Social and Governance and is an approach to running a business, or investing in a business, which recognises that there is more to success than profit. It is part of the overall awareness – in business and from consumers – that sustainability must be a key focus if businesses, communities and the planet are to survive and thrive. Businesses with an ESG approach see themselves as part of the larger picture, contributing to environmental sustainability, social cohesion and an ethical way of engaging with their partners, suppliers, customers and community. Many of today’s investors will only put their money into companies that are run on ESG principles.
Why has ESG become so important?
For many companies, there has long been a focus on sustainability in the way they run their business, but in recent years, this approach has seen a dramatic acceleration in take-up. This has been driven by several factors: a growing awareness of the immediacy of the dangers of climate change; the pandemic changed consumer attitudes and has seen a shift in buying decisions towards more environmentally friendly businesses; and consumers ‘voting with their wallets’ and shifting their spend to ESG brands.