According to a new report, the UK wholesale and retail sector faces one of the most challenging journeys to decarbonisation.
The Journey to Net Zero report, commissioned by insurer Zurich UK and conducted by the University of the West of England, recognises retail as one of the top six sectors that will struggle most to decrease their emissions and meet UK Net Zero goals.
The British Retail Consortium (BRC) has committed to reaching Net-Zero by 2040, but the report signposts several challenges ahead. Food and drink retailers are anticipated to face a difficult transition, as the grocery sector produces the highest share of retail industry carbon emissions.
Challenges and solutions
One of the key obstacles to decarbonisation which was identified in the report was accounting for emissions embedded in the supply chain, mainly emissions generated when goods are transported from the source to the overall final sale. Retailers can undertake this by working closely with their suppliers to measure supply chain emissions accurately and highlighting sustainable sourcing for their products.
The report also identified waste as a significant sustainability issue, highlighting the need for retailers to consider what happens to their products after they are purchased. Household food and textile waste is an essential contributor to landfill emissions, and diverting these products from landfills by finding ways to reuse them through the circular economy, this would be a key element for retailers to focus on.
Behaviour change is another key challenge facing the retail sector. Growing consumer understanding of carbon emissions at the point of sale through a 'traffic-light' system, where red-labelled products have the highest carbon footprint and green the lowest, could positively impact changing buying habits.
The report suggests that behaviour change initiatives like this would advantage from coordinated Government support and legislation to certify that they are implemented commonly and consistently throughout the wholesale and retail industry.
Lowering the carbon emissions must be at the essential of decision-making, and business processes. This includes reducing emissions from shops and stores. Many retailers are already making in-roads in this department. However, significant energy developments are still required, from better monitoring of energy usage and control systems to using more effective refrigerators and LED lights.
Sam Thomas, Head of Mid-Market at Zurich.co.uk, had this to say: "As this report shows, consumers' decisions when they purchase, use, and dispose of products all impact carbon emissions connected to the industry.
Retailers, therefore, have an important role in influencing consumer behaviour and helping customers make low carbon choices, whether through the provision of information, the reduction of packaging and waste or the availability of efficient, long-lasting and responsibly sourced products, among other initiatives.
Government support would help retailers and the connected supply chain to facilitate a more informed consumer purchase and drive the behaviour change that would benefit our wider communities."
Dr Laura de Vito, lead report author from the University of the West of England Faculty of Environment and Technology said to Zurich.co.uk:
“The UK industrial sectors are highly interconnected and therefore it is important to adopt a joined-up and collaborative approach to Net Zero. Solutions are available - we now must focus our efforts in implementing them, especially in light of the recent IPCC report which demands urgent and decisive change.
“The UK government will need to play a crucial role in driving this change at the required scale and pace, and in unlocking collaboration opportunities across industry sectors and at all levels of society.”
Risks and Opportunities
- Logistics and the movement of high volumes of goods represent a significant source of carbon emissions.
- The consultancy Deloitte reveals that in the retail sector, the shift to digital is consolidating and online sales which will have significant implications on logistics and provides opportunities for decarbonisation.
- Waste is a significant barrier to decarbonising the retail sector. Textiles are associated with one of the most carbon intensive waste stream.
- The BRC highlighted major energy improvements in retail operations and stores through better monitoring of energy use and control systems, more efficient refrigerators, installation of LED lights, and other small-scale operational optimisation measures 41.
- Business practices should be reorganised to put low-carbon emissions at the core of decision-making, including reducing emissions from shops and logistics and prioritising sustainable sourcing, together with supporting customers and employees to switch to more sustainable lifestyles.
- CSR processes can be strengthened to integrate carbon reduction targets in line with the national targets. Placing carbon data at the core of business decisions will enable this pathway.
- The focus of the retail sector should be to drive down textile and food waste in retailing activities and customers’ homes, as well as supporting low carbon choices. Emissions factors for products could be reflected directly at the point of sale, thus increasing customers’ awareness of the carbon intensity of the goods.
- Circular economy is considered to be key to minimise waste of material and food and can generate emission savings.
- There is a need to provide training and information to employees on low carbon lifestyles and on providing climate guidance to customers.
- The UK Government should work with stakeholders and wholesale and retail companies to enable behaviour change and support informed choices. The BRC suggested that the UK Government could develop consistent carbon accounting mechanisms, linked to pricing frameworks.